Washington, D.C. 20549
|X| Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2016 | or | | | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware (State or other jurisdiction of incorporation or organization) | 65-1051192 (IRS Employer Identification No.) | ||||||
11 West 42nd Street, New York, New York (Address of Registrant’s principal executive offices) | 10036 (Zip Code) | ||||||
(212) 461-5200 Registrant’s telephone number including area code: | |||||||
Securities registered pursuant to Section 12(b) of the Act: | |||||||
Title of each class Common Stock, par value $0.01 per share | Name of each exchange on which registered New York Stock Exchange | ||||||
Securities registered pursuant to Section 12(g) of the Act: None |
Yes |X| No | |
Yes | | No |X|
Yes | | No |X|
Yes |X| No | |
CONTENTS
Part One | |||||||||||
Item 1. | Business Overview | 2 | |||||||||
Where You Can Find More Information | 18 | ||||||||||
Item 1A. | Risk Factors | 23 | |||||||||
Item 1B. | Unresolved Staff Comments | 34 | |||||||||
Item 2. | Properties | 34 | |||||||||
Item 3. | Legal Proceedings | 34 | |||||||||
Item 4. | Mine Safety Disclosures | 34 | |||||||||
Part Two | |||||||||||
Item 5. | Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities | 35 | |||||||||
Item 6. | Selected Financial Data | 37 | |||||||||
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 40 | |||||||||
Item 7A. | Quantitative and Qualitative Disclosure about Market Risk | 40 | |||||||||
Item 8. | Financial Statements and Supplementary Data | 103 | |||||||||
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 221 | |||||||||
Item 9A. | Controls and Procedures | 221 | |||||||||
Item 9B. | Other Information | 223 | |||||||||
Part Three | |||||||||||
Item 10. | Directors, Executive Officers and Corporate Governance | 224 | |||||||||
Item 11. | Executive Compensation | 224 | |||||||||
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 224 | |||||||||
Item 13. | Certain Relationships and Related Transactions, and Director Independence | 224 | |||||||||
Item 14. | Principal Accountant Fees and Services | 224 | |||||||||
Part Four | |||||||||||
Item 15. | Exhibits and Financial Statement Schedules | 225 | |||||||||
Signatures | 231 |
Item 1: Business Overview
Products and Services | ||||||
• Account receivables collection | • Equipment leases | |||||
• Acquisition and expansion financing | • Factoring services | |||||
• Asset management and servicing | • Financial risk management | |||||
• Asset-based loans | • Import and export financing | |||||
• Credit protection | • Insurance services | |||||
• Cash management and payment services | • Letters of credit / trade acceptances | |||||
• Debt restructuring | • Merger and acquisition advisory services | |||||
• Debt underwriting and syndication | • Residential mortgage loans and mortgage servicing | |||||
• Deposits | • Secured lines of credit | |||||
• Enterprise value and cash flow loans | • Small Business Administration (“SBA”) loans |
BUSINESS SEGMENTS
SEGMENT NAME | DIVISIONS | MARKETS AND SERVICES | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Commercial Banking | Commercial Finance Rail Real Estate Finance Business Capital | • Commercial Finance, Real Estate Finance, and Business Capital provide lending, leasing and other financial and advisory services, primarily to small and middle-market companies across select industries. • Business Capital also provides factoring, receivables management products and secured financing to the retail supply chain. • Rail provides equipment leasing and secured financing to the rail industry. | ||||||||
Consumer Banking | Other Consumer Banking (collectively includes Retail Banking, SBA Lending and Consumer Lending) Legacy Consumer Mortgages (“LCM”) | • Other Consumer Banking includes a full suite of deposit products, single family residential (“SFR”) loans offered through retail branches, and an online direct channel, and also provides SBA loans. • LCM consists of SFR loans acquired in the OneWest Transaction, which includes reverse mortgage loans, certain of which are covered by loss sharing agreements with the FDIC. | ||||||||
Non-Strategic Portfolios | • Consists of portfolios that we do not consider strategic equipment finance and secured lending in select international geographies. | |||||||||
Corporate and Other | • Includes investments and other unallocated items, such as amortization of certain intangible assets. |
- | In the first quarter of 2016, following a previously announced reorganized management structure, CIT realigned its segments. The Commercial Banking segment (formerly North America Banking or “NAB”) was comprised of Commercial Finance, Real Estate Finance, and Business Capital, and no longer includes the Consumer Banking division, which was moved to the Consumer Banking segment. Also, Equipment Finance and Commercial Services, business units that were formerly discrete divisions in the 2015 filing, are now included in Business Capital. In the third quarter of 2016, the Canadian Equipment and Corporate Finance businesses that were within the Business Capital and Commercial Finance divisions, respectively, were transferred to NSP. In the fourth quarter of 2016 we further realigned our segments with Rail becoming a fourth division of Commercial Banking. Also as part of the fourth quarter realignment, Maritime Finance and the remaining commercial air loans not part of discontinued operations were transferred to Commercial Finances. Rail, Maritime Finance and commercial air loans and investments not part of discontinued operations were previously all part of the Transportation Finance segment. |
- | Transportation Finance (formerly Transportation & International Finance or “TIF”) no longer exists as a separate business segment. In our initial realignment in the first quarter of 2016, we transferred the international businesses in China and the U.K. to NSP, such that Transportation Finance was then comprised of three divisions, Aerospace (composed of Commercial Air and Business Air), Rail and Maritime Finance. Based on the definitive sale agreement with respect to Commercial Air that we executed on October 6, 2016, the activity of the Commercial Air business that is subject to the sale agreement, as well as activity associated with the Business Air assets are reported as discontinued operations as of December 31, 2016. As mentioned above, Rail, Maritime Finance and commercial air loans not part of discontinued operations were transferred to Commercial Banking. |
- | Consumer Banking includes Legacy Consumer Mortgages (the former LCM segment) and other banking divisions that were included in the former NAB segment (Retail Banking, Consumer Lending, and SBA Lending). |
- | NSP includes businesses that we no longer consider strategic and as of December 31, 2016, the remaining portfolio is primarily in China. Historic data also includes businesses and portfolios that have been sold, in countries such as Canada, the U.K., Mexico, and Brazil. |
Operationsand Item 8. Financial Statements and Supplementary Data (Note 25 — Business Segment Information).
receivable due to the factor. While less significant than customer credit exposure, there is also client credit risk in providing cash advances to factoring clients. Client credit risk relates to a decline in the creditworthiness of a borrowing client, their consequent inability to repay their loan and the possible insufficiency of the underlying collateral (including the aforementioned customer accounts receivable) to cover any loan repayment shortfall. At December 31, 2016, client credit risk accounted for less than 10% of total Commercial Services credit exposure while customer credit risk accounted for the remainder.
conditions or a potential natural disaster, such as earthquake or wildfire, in that region. As discussed inNote 5 —Indemnification Assets ofItem 8. Financial Statements and Supplementary Data, certain indemnifications from the FDIC begin to expire in 2019.
CIT BANK, N.A.
DISCONTINUED OPERATIONS
business, there is no extension of credit to the obligor. Instead, the lessor deploys a portion of the useful life of the asset. Credit losses manifest through multiple parts of the income statement including loss of lease/rental income due to missed payments, time off lease, or lower rental payments than the existing contract due to either a restructuring with the existing obligor or re-leasing of the asset to another obligor as well as higher expenses due to, for example, repossession costs to recover, refurbish, and re-lease assets.
EMPLOYEES
COMPETITION
REGULATION
services in its assessment areas, locating 15% of its branches and ATMs in LMI census tracts, and providing 2,100 hours of CRA volunteer service.
capital measures be made to CET1 and not to the other components of capital; and (iv) expands the scope of the deductions from and adjustments to capital as compared to previous regulations. For most banking organizations, the most common form of Additional Tier 1 capital instruments is non-cumulative perpetual preferred stock and the most common form of Tier 2 capital instruments is subordinated notes, which are subject to the Basel III Final Rule specific requirements. The Company does not currently have either of these forms of capital outstanding.
Minimum Capital Requirements — January 1, 2019 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
CET 1 | Tier 1 Capital | Total Capital | |||||||||||||
Stated minimum ratios | 4.5 | % | 6.0 | % | 8.0 | % | |||||||||
Capital conservation buffer (fully phased-in) | 2.5 | % | 2.5 | % | 2.5 | % | |||||||||
Effective minimum ratios (fully phased-in) | 7.0 | % | 8.5 | % | 10.5 | % | |||||||||
Effective minimum ratios (as of December 31, 2016) | 5.125 | % | 6.625 | % | 8.625 | % |
CIT | CIT Bank | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Actuals | Requirement | Actuals | Requirement | ||||||||||||||||
Capital | |||||||||||||||||||
CET1 | $ | 9,003.7 | $ | 4,566.6 | |||||||||||||||
Tier 1 | 9,003.7 | 4,566.6 | |||||||||||||||||
Total | 9,480.0 | 4,996.9 | |||||||||||||||||
Risk-weighted assets | 65,068.2 | 34,696.4 | |||||||||||||||||
Adjusted quarterly average assets | 64,902.5 | 42,250.7 | |||||||||||||||||
Capital ratios | |||||||||||||||||||
CET1 | 13.8 | % | 7.0 | %(2) | 13.2 | % | 7.0 | %(2) | |||||||||||
Tier 1 | 13.8 | % | 8.5 | %(2) | 13.2 | % | 8.5 | %(2) | |||||||||||
Total | 14.6 | % | 10.5 | %(2) | 14.4 | % | 10.5 | %(2) | |||||||||||
Leverage | 13.9 | % | 4.0 | % | 10.8 | % | 4.0 | % |
(1) | Basel III Final Rule calculated under the Standardized Approach on a fully phased-in basis that will be required effective January 1, 2019. |
(2) | Required ratios under the Basel III Final Rule include the post-transition minimum capital conservation buffer effective January 1, 2019. |
(including supervisor-provided baseline, adverse, and severely adverse scenarios and, for CIT, one company-defined baseline scenario and at least one company-defined stress scenario) on their consolidated earnings, losses, and capital over a nine-quarter planning horizon, taking into account their current condition, risks, exposures, strategies, and activities. While CIT Bank is only required to conduct an annual stress test, CIT must conduct both an annual and a mid-cycle stress test. Both CIT and CIT Bank must submit their annual DFAST results to their respective regulators by July 31, 2017, with public disclosure of summary stress test results between October 15 and October 31, 2017.
be subject to the OLA process. This resolution authority is similar to the FDIC resolution model for depository institutions, with certain modifications to reflect differences between depository institutions and non-bank financial companies and to reduce disparities between the treatment of creditors’ claims under the U.S. Bankruptcy Code and in an orderly liquidation authority proceeding compared to those that would exist under the resolution model for insured depository institutions.
Prompt Corrective Action Ratios — December 31, 2016 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Well Capitalized(1) | Adequately Capitalized | ||||||||||
CET 1 | 6.5 | % | 4.5 | % | |||||||
Tier 1 Capital | 8.0 | % | 6.0 | % | |||||||
Total Capital | 10.0 | % | 8.0 | % | |||||||
Tier 1 Leverage(2) | 5.0 | % | 4.0 | % |
(1) | A “well capitalized” institution also must not be subject to any written agreement, order or directive to meet and maintain a specific capital level for any capital measure. |
(2) | As a standardized approach banking organization, CIT Bank is not subject to the 3% supplemental leverage ratio requirement, which becomes effective January 1, 2018. |
stockholders, and its creditors to participate in any distribution of the assets or earnings of its subsidiaries is further subject to prior claims of creditors of CIT Bank and CIT’s other subsidiaries.
- | to transfer any of the depository institution’s assets and liabilities to a new obligor without the approval of the depository institution’s creditors; |
- | to enforce the terms of the depository institution’s contracts pursuant to their terms; or |
- | to repudiate or disaffirm any contract or lease to which the depository institution is a party, the performance of which is determined by the FDIC to be burdensome and the disaffirmance or repudiation of which is determined by the FDIC to promote the orderly administration of the depository institution. |
- | the federal Truth-In-Lending Act and Regulation Z, governing disclosures of credit terms to consumer borrowers; |
- | the Home Mortgage Disclosure Act and Regulation C, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; |
- | the Equal Credit Opportunity Act and Regulation B, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; |
- | the Fair Credit Reporting Act and Regulation V, governing the use and provision of information to consumer reporting agencies; |
- | the Fair Debt Collections Practices Act, governing the manner in which consumer debts may be collected by debt collectors; |
- | the Servicemembers Civil Relief Act, applying to all debts incurred prior to commencement of active military service (including credit card and other open-end debt) and limiting the amount of interest, including service and renewal charges and any other fees or charges (other than bona fide insurance) that is related to the obligation or liability, as well as affording other protections, including with respect to foreclosures; and |
- | the guidance of the various federal agencies charged with the responsibility of implementing such laws; and |
- | the Real Estate Settlement Procedures Act and Regulation X, requiring disclosures regarding the nature and costs of the real estate settlement process and governing transfers of servicing, escrow accounts, force-placed insurance, and general servicing policies. |
- | the Truth in Savings Act and Regulation DD, which require disclosure of deposit terms to consumers; |
- | Regulation CC, which relates to the availability of deposit funds to consumers; |
- | the Right to Financial Privacy Act, which imposes a duty to maintain the confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; and |
- | the Electronic Funds Transfer Act and Regulation E, which governs electronic deposits to and withdrawals from deposit accounts and customer’ rights and liabilities arising from the use of automated teller machines and other electronic banking services, including remittance transfers. |
requirements or programs for depository institutions nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with the CRA. Depository institutions are periodically examined for compliance with the CRA and are assigned ratings, which are made available to the public. In order for a financial holding company to commence any new activity permitted by the BHC Act, or to acquire any company engaged in any new activity permitted by the BHC Act, each insured depository institution subsidiary of the financial holding company must have received a rating of at least “satisfactory” in its most recent examination under the CRA. Furthermore, banking regulators take into account CRA ratings when considering approval of applications to acquire, merge, or consolidate with another banking institution or its holding company, to establish a new branch office that will accept deposits or to relocate an office, and such record may be the basis for denying the application. CIT Bank received a rating of “Satisfactory” on its most recent CRA examination by the OCC.
privacy provisions of the GLBA affect how consumer information is transmitted through diversified financial services companies and conveyed to outside vendors. Federal financial regulators have issued regulations under the Fair and Accurate Credit Transactions Act that have the effect of increasing the length of the waiting period, after privacy disclosures are provided to new customers, before information can be shared among different affiliated companies for the purpose of cross-selling products and services between those affiliated companies. In many foreign jurisdictions, the Company is also restricted from sharing customer or client information with third party non-affiliates.
- | regulate credit granting activities, including establishing licensing requirements, if any, in various jurisdictions; |
- | establish maximum interest rates, finance charges and other charges; |
- | regulate customers’ insurance coverages; |
- | require disclosures to customers; |
- | govern secured transactions; |
- | set collection, foreclosure, repossession and claims handling procedures and other trade practices; |
- | prohibit discrimination in the extension of credit and administration of loans; and |
- | regulate the use and reporting of information related to a borrower’s credit experience and other data collection. |
WHERE YOU CAN FIND MORE INFORMATION
GLOSSARY OF TERMS
- | Pass — These assets do not meet the criteria for classification in one of the other categories; |
- | Special Mention — These assets exhibit potential weaknesses that deserve management’s close attention and if left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects; |
- | Substandard — These assets are inadequately protected by the current sound worth and paying capacity of the borrower, and are characterized by the distinct possibility that some loss will be sustained if the deficiencies are not corrected; |
- | Doubtful — These assets have weaknesses that make collection in full unlikely on the basis of current facts, conditions, and values and |
- | Loss — These assets are considered uncollectible and of little or no value and are generally charged off. |
Acronym | Definition | Acronym | Definition | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
AEA | Average Earnings Assets | HELOC | Home Equity Lines of Credit | |||||||||||
AFR | Average Finance Receivables | HFI | Held for Investment | |||||||||||
AFS | Available for Sale | HTM | Held to Maturity | |||||||||||
AHFS | Assets Held for Sale | HUD | U.S. Department of Housing and Urban Development | |||||||||||
ALLL | Allowance for Loan and Lease Losses | IT | Information Technology | |||||||||||
ALM | Asset and Liability Management | LCM | Legacy Consumer Mortgages | |||||||||||
AOCI | Accumulated Other Comprehensive Income | LCR | Liquidity Coverage Ratio | |||||||||||
AOL | Average Operating Leases | LGD | Loss Given Default | |||||||||||
ARM | Adjustable Rate Mortgage | LIHTC | Low Income Housing Tax Credit | |||||||||||
ASC | Accounting Standards Codification | LOCOM | Lower of the Cost or Market Value | |||||||||||
ASU | Accounting Standards Update | LTV | Loan-to-Value | |||||||||||
AVA | Actuarial Valuation Allowance | MBS | Mortgage-Backed Securities | |||||||||||
BHC | Bank Holding Company | MSR | Mortgage Servicing Rights | |||||||||||
BPS | Basis point(s); 1bp=0.01% | NFM | Net Finance Margin | |||||||||||
CCAR | Comprehensive Capital Analysis and Review | NFR | Net Finance Revenue | |||||||||||
CDI | Core Deposit Intangibles | NII Sensitivity | Net Interest Income Sensitivity | |||||||||||
CET 1 | Common Equity Tier 1 | NIM | Net Interest Margin | |||||||||||
CRA | Community Reinvestment Act | NOLs | Net Operating Loss Carry-Forwards | |||||||||||
CTA | Currency Translation Adjustment | NSP | Non-Strategic Portfolios | |||||||||||
DCF | Discounted Cash Flows | OCC | Office of the Comptroller of the Currency | |||||||||||
DPA | Deferred Purchase Agreement | OCI | Other Comprehensive Income | |||||||||||
DTAs | Deferred Tax Assets | OREO | Other Real Estate Owned | |||||||||||
DTLs | Deferred Tax Liabilities | OTTI | Other than Temporary Impairment | |||||||||||
ECAP | Enterprise Stress Testing and Economic Capital | PAA | Purchase Accounting Adjustments | |||||||||||
EMC | Executive Management Committee | PB | Primary Beneficiary | |||||||||||
EPS | Earnings Per Share | PCI | Purchased Credit-Impaired Loans/Securities | |||||||||||
ERM | Enterprise Risk Management | PD | Probability of Obligor Default | |||||||||||
EVE | Economic Value of Equity | ROA | Return on Average Earning Assets | |||||||||||
FDIC | Federal Deposit Insurance Corporation | ROTCE | Return on Tangible Common Stockholders’ Equity | |||||||||||
FHA | Federal Housing Administration | SBA | Small Business Administration | |||||||||||
FHC | Financial Holding Company | SEC | Securities and Exchange Commission | |||||||||||
FHLB | Federal Home Loan Bank | SFR | Single Family Residential | |||||||||||
FICO | Fair, Isaac Corporation | SGA | Selling, General and Administration Expenses | |||||||||||
FLA | Financing and Leasing Assets | SIFI | Systemically Important Financial Institution | |||||||||||
FNMA | Federal National Mortgage Association | SOP | Statement of Position | |||||||||||
FRB | Board of Governors of the Federal Reserve System | TBV | Tangible Book Value | |||||||||||
FRBNY | Federal Reserve Bank of New York | TCE | Tangible Common Stockholders’ Equity | |||||||||||
FV | Fair Value | TDR | Troubled Debt Restructuring | |||||||||||
GAAP | Accounting Principles Generally Accepted in the U.S. | TRS | Total Return Swaps | |||||||||||
GSEs | Government-Sponsored Enterprises | UPB | Unpaid Principal Balance | |||||||||||
HECM | Home Equity Conversion Mortgage | VIE | Variable Interest Entity |
Item 1A. Risk Factors
diversify our business and products, risk that we may not be able to return capital to shareholders as planned, and increased expenses without a commensurate increase in revenues.
such as payment of dividends or otherwise returning capital to shareholders. If we are unable to meet any of these capital or liquidity standards, it may have a material adverse effect on our business, results of operations and financial condition.
and leverage capital requirements and information reporting requirements. This regulatory oversight is established to protect depositors, federal deposit insurance funds and the banking system as a whole, and is not intended to protect debt and equity security holders. If we fail to satisfy regulatory requirements applicable to bank holding companies that have elected to be treated as financial holding companies, including maintaining our status as well managed and well capitalized, our financial condition and results of operations could be adversely affected, and we may be restricted in our ability to undertake certain capital actions (such as declaring dividends or repurchasing outstanding shares) or to engage in certain activities or acquisitions. In addition, our banking regulators have significant discretion in the examination and enforcement of applicable banking statutes and regulations, and may restrict our ability to engage in certain activities or acquisitions, or may require us to maintain more capital.
matters could have a material adverse effect on our business, financial condition, or results of operations.
participate in the mortgage industry, including forward mortgages and reverse mortgages, or that they will not make material changes to the laws, regulations, rules or practices applicable to the mortgage industry. For example, the FHA has issued regulations since January 1, 2013, governing its reverse mortgage program that impact initial mortgage insurance premiums and principal limit factors, impose restrictions on the amount of funds that senior borrowers may draw down at closing and during the first 12 months after closing, and will require a financial assessment for all borrowers to ensure that they have the capacity and willingness to meet their financial obligations and the terms of the reverse mortgage. In addition, the changes require borrowers to set aside a portion of the loan proceeds they receive at closing (or withhold a portion of monthly loan disbursements) for the payment of property taxes and homeowners insurance based on the results of the financial assessment. Similarly, the CFPB has issued new rules for mortgage origination and mortgage servicing. Both the origination and servicing rules create new private rights of action for consumers against lenders and servicers in the event of certain violations.
of the risks described above materialize, it could adversely impact our operating results and financial condition.
decrease in prices or reduced demand for certain raw materials or bulk products, such as oil, coal, or steel, may result in a significant decrease in gross revenues and profits of our borrowers and lessees or a decrease in demand for certain types of equipment for the production, processing and transport of such raw materials or bulk products, including certain specialized railcars, which may adversely affect the ability of our customers to make payments on their loans and leases and the value of our rail assets and other leased equipment.
stringent requirements, particularly for larger institutions, it cannot be determined at this time whether or when a final rule will be adopted. Compliance with such a final rule may substantially affect the manner in which we structure compensation for our executives and other employees. Depending on the nature and application of the final rules, we may not be able to successfully compete with certain financial institutions and other companies that are not subject to some or all of the rules to retain and attract executives and other high performing employees. If this were to occur, our business, financial condition and results of operations would be adversely affected.
terrorist activities, or international hostilities also could be increased to the extent that there is a lack of preparedness on the part of national or regional emergency responders or on the part of other organizations and businesses that we deal with, particularly those that we depend upon but have no control over.
Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Mine Safety Disclosures
Item 5. | Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities |
2016 | 2015 | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Common Stock | High | Low | High | Low | |||||||||||||||
First Quarter | $ | 39.70 | $ | 25.65 | $ | 47.83 | $ | 43.34 | |||||||||||
Second Quarter | $ | 34.57 | $ | 28.45 | $ | 48.07 | $ | 44.62 | |||||||||||
Third Quarter | $ | 36.88 | $ | 30.66 | $ | 48.51 | $ | 39.61 | |||||||||||
Fourth Quarter | $ | 43.85 | $ | 35.25 | $ | 46.14 | $ | 39.70 |
Per Share Dividend | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Declaration Date | 2016 | 2015 | |||||||||
January | $ | 0.15 | $ | 0.15 | |||||||
April | $ | 0.15 | $ | 0.15 | |||||||
July | $ | 0.15 | $ | 0.15 | |||||||
October | $ | 0.15 | $ | 0.15 |
Number of Securities to be Issued Upon Exercise of Outstanding Options | Weighted-Average Exercise Price of Outstanding Options | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity compensation plans approved by shareholders and the Court | 7,268 | $33.80 | 6,284,699* |
* | Excludes the number of securities to be issued upon exercise of outstanding options and 3,286,786 shares underlying outstanding awards granted to employees and/or directors that are unvested and/or unsettled. |
* | Amended capital plan approval authorizes CIT to return $2.975 billion of common equity from the net proceeds of the Commercial Air sale; additional $0.325 billion contingent upon the issuance of a similar amount of Tier 1 qualifying preferred stock. |
Item 6. Selected Financial Data
At or for the Years Ended December 31, | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Select Statement of Operations Data | |||||||||||||||||||||||
Net interest revenue | $ | 1,158.3 | $ | 713.8 | $ | 440.5 | $ | 439.2 | $ | (464.5 | ) | ||||||||||||
Provision for credit losses | (194.7 | ) | (158.6 | ) | (104.4 | ) | (75.3 | ) | (41.7 | ) | |||||||||||||
Total non-interest income | 1,182.2 | 1,167.7 | 1,213.5 | 1,183.0 | 1,407.7 | ||||||||||||||||||
Total non-interest expenses | 2,124.9 | 1,536.9 | 1,305.1 | 1,252.2 | 1,208.7 | ||||||||||||||||||
(Loss) income from continuing operations | (182.6 | ) | 724.1 | 675.7 | 238.4 | (388.8 | ) | ||||||||||||||||
Net (loss) income | (848.0 | ) | 1,034.1 | 1,119.1 | 675.7 | (592.3 | ) | ||||||||||||||||
Per Common Share Data | |||||||||||||||||||||||
Diluted (loss) income per common share — continuing operations | $ | (0.90 | ) | $ | 3.89 | $ | 3.57 | $ | 1.18 | $ | (1.94 | ) | |||||||||||
Diluted (loss) income per common share | $ | (4.20 | ) | $ | 5.55 | $ | 5.91 | $ | 3.35 | $ | (2.95 | ) | |||||||||||
Book value per common share | $ | 49.50 | $ | 54.45 | $ | 50.07 | $ | 44.78 | $ | 41.49 | |||||||||||||
Tangible book value per common share | $ | 45.41 | $ | 48.33 | $ | 47.59 | $ | 43.56 | $ | 40.22 | |||||||||||||
Dividends declared per common share | $ | 0.60 | $ | 0.60 | $ | 0.50 | $ | 0.10 | $ | – | |||||||||||||
Dividend payout ratio | NM | 10.8 | % | 8.5 | % | 3.0 | % | – | |||||||||||||||
Performance Ratios | |||||||||||||||||||||||
Pre-tax return from continuing operations on average tangible common stockholders’ equity | 0.2 | % | 1.9 | % | 2.8 | % | 3.4 | % | (3.6 | )% | |||||||||||||
Return (continuing operations) on average common stockholders’ equity | (1.6 | )% | 7.5 | % | 7.7 | % | 2.8 | % | (4.6 | )% | |||||||||||||
Net finance revenue as a percentage of average earning assets | 3.60 | % | 3.47 | % | 3.30 | % | 3.37 | % | 0.11 | % | |||||||||||||
Return on average earning assets | (1.78 | )% | 2.72 | % | 3.74 | % | 2.41 | % | (2.31 | )% | |||||||||||||
Return on average continuing operations total assets | (0.34 | )% | 1.68 | % | 2.01 | % | 0.78 | % | (1.39 | )% | |||||||||||||
Balance Sheet Data | |||||||||||||||||||||||
Loans including receivables pledged | $ | 29,535.9 | $ | 30,518.7 | $ | 18,260.6 | $ | 17,745.3 | $ | 16,304.5 | |||||||||||||
Allowance for loan losses | (432.6 | ) | (347.0 | ) | (334.2 | ) | (339.1 | ) | (353.0 | ) | |||||||||||||
Operating lease equipment, net | 7,486.1 | 6,851.7 | 5,980.9 | 4,765.7 | 4,304.2 | ||||||||||||||||||
Goodwill | 685.4 | 1,063.2 | 432.3 | 233.7 | 245.0 | ||||||||||||||||||
Total cash and deposits | 6,430.6 | 7,652.4 | 6,155.2 | 5,369.0 | 6,139.7 | ||||||||||||||||||
Investment securities | 4,491.1 | 2,953.7 | 1,550.3 | 2,630.2 | 1,065.5 | ||||||||||||||||||
Assets of discontinued operation | 13,220.7 | 13,059.6 | 12,493.7 | 14,742.1 | 14,625.6 | ||||||||||||||||||
Total assets | 64,170.2 | 67,391.9 | 47,755.5 | 46,996.8 | 43,860.1 | ||||||||||||||||||
Deposits | 32,304.3 | 32,761.4 | 15,838.7 | 12,523.3 | 9,681.5 | ||||||||||||||||||
Borrowings | 14,935.5 | 16,350.3 | 15,969.7 | 16,036.5 | 15,683.5 | ||||||||||||||||||
Liabilities of discontinued operation | 3,737.7 | 4,302.0 | 3,818.1 | 6,993.7 | 7,540.3 | ||||||||||||||||||
Total common stockholders’ equity | 10,002.7 | 10,944.7 | 9,057.9 | 8,838.8 | 8,334.8 | ||||||||||||||||||
Credit Quality | |||||||||||||||||||||||
Non-accrual loans as a percentage of finance receivables | 0.94 | % | 0.83 | % | 0.88 | % | 1.28 | % | 1.83 | % | |||||||||||||
Net charge-offs as a percentage of average finance receivables | 0.37 | % | 0.58 | % | 0.55 | % | 0.47 | % | 0.48 | % | |||||||||||||
Allowance for loan losses as a percentage of finance receivables | 1.46 | % | 1.14 | % | 1.83 | % | 1.91 | % | 2.17 | % | |||||||||||||
Capital Ratios | |||||||||||||||||||||||
Total ending equity to total ending assets | 15.6 | % | 16.2 | % | 19.0 | % | 18.8 | % | 19.0 | % | |||||||||||||
Common Equity Tier 1 Capital Ratio (fully phased-in) | 13.8 | % | 12.6 | % | – | – | – | ||||||||||||||||
Tier 1 Capital Ratio (fully phased-in) | 13.8 | % | 12.6 | % | 14.5 | % | 16.7 | % | 16.2 | % | |||||||||||||
Total Capital Ratio (fully phased-in) | 14.6 | % | 13.2 | % | 15.1 | % | 17.4 | % | 17.0 | % |
December 31, 2016 | December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Average Balance | Revenue / Expense(6) | Average Rate (%) | Average Balance | Revenue / Expense(6) | Average Rate (%) | Average Balance | Revenue / Expense(6) | Average Rate (%) | |||||||||||||||||||||||||||||||
Interest bearing deposits | $ | 6,450.6 | $ | 33.1 | 0.51 | % | $ | 5,486.6 | $ | 17.1 | 0.31 | % | $ | 4,652.5 | $ | 17.7 | 0.38 | % | |||||||||||||||||||||
Securities purchased under agreements to resell | – | – | – | 411.5 | 2.3 | 0.56 | % | 242.3 | 1.2 | 0.50 | % | ||||||||||||||||||||||||||||
Investment securities | 3,384.0 | 98.8 | 2.92 | % | 2,239.3 | 51.8 | 2.31 | % | 1,667.6 | 16.6 | 1.00 | % | |||||||||||||||||||||||||||
Loans (including held for sale)(2)(3) | |||||||||||||||||||||||||||||||||||||||
U.S.(2) | 30,482.5 | 1,708.8 | 5.85 | % | 22,810.3 | 1,189.2 | 5.58 | % | 15,726.3 | 834.2 | 5.81 | % | |||||||||||||||||||||||||||
Non-U.S. | 1,037.1 | 95.0 | 9.16 | % | 2,016.2 | 185.3 | 9.19 | % | 3,269.0 | 285.9 | 8.75 | % | |||||||||||||||||||||||||||
Total loans(2) | 31,519.6 | 1,803.8 | 5.97 | % | 24,826.5 | 1,374.5 | 5.89 | % | 18,995.3 | 1,120.1 | 6.35 | % | |||||||||||||||||||||||||||
Total interest earning assets / interest income(2)(3) | 41,354.2 | 1,935.7 | 4.83 | % | 32,963.9 | 1,445.7 | 4.59 | % | 25,557.7 | 1,155.6 | 4.78 | % | |||||||||||||||||||||||||||
Operating lease equipment, net (including held for sale)(4) | |||||||||||||||||||||||||||||||||||||||
U.S.(4) | 5,855.4 | 447.1 | 7.64 | % | 5,178.9 | 491.2 | 9.48 | % | 4,846.8 | 454.9 | 9.39 | % | |||||||||||||||||||||||||||
Non-U.S.(4) | 1,367.4 | 109.8 | 8.03 | % | 1,180.7 | 112.6 | 9.54 | % | 923.1 | 93.2 | 10.10 | % | |||||||||||||||||||||||||||
Total operating lease equipment, net(4) | 7,222.8 | 556.9 | 7.71 | % | 6,359.6 | 603.8 | 9.49 | % | 5,769.9 | 548.1 | 9.50 | % | |||||||||||||||||||||||||||
Indemnification assets | 373.8 | (24.2 | ) | (6.47 | )% | 188.6 | (0.5 | ) | (0.27 | )% | – | – | – | ||||||||||||||||||||||||||
Total earning assets(2) | 48,950.8 | $ | 2,468.4 | 5.18 | % | 39,512.1 | $ | 2,049.0 | 5.39 | % | 31,327.6 | $ | 1,703.7 | 5.69 | % | ||||||||||||||||||||||||
Non interest earning assets | |||||||||||||||||||||||||||||||||||||||
Cash due from banks | 882.1 | 967.6 | 836.5 | ||||||||||||||||||||||||||||||||||||
Allowance for loan losses | (390.8 | ) | (333.0 | ) | (334.9 | ) | |||||||||||||||||||||||||||||||||
All other non-interest earning assets | 4,048.3 | 2,958.3 | 1,719.0 | ||||||||||||||||||||||||||||||||||||
Assets of discontinued operation | 13,021.2 | 12,333.1 | 12,854.9 | ||||||||||||||||||||||||||||||||||||
Total Average Assets | $ | 66,511.6 | $ | 55,438.1 | $ | 46,403.1 | |||||||||||||||||||||||||||||||||
Average Liabilities | |||||||||||||||||||||||||||||||||||||||
Borrowings | |||||||||||||||||||||||||||||||||||||||
Deposits | $ | 31,545.1 | $ | 394.8 | 1.25 | % | $ | 22,762.7 | $ | 330.1 | 1.45 | % | $ | 13,890.9 | $ | 231.0 | 1.66 | % | |||||||||||||||||||||
Borrowings(5) | 15,493.6 | 358.4 | 2.31 | % | 15,519.1 | 401.3 | 2.59 | % | 15,977.0 | 484.1 | 3.03 | % | |||||||||||||||||||||||||||
Total interest-bearing liabilities | 47,038.7 | 753.2 | 1.60 | % | 38,281.8 | 731.4 | 1.91 | % | 29,867.9 | 715.1 | 2.39 | % | |||||||||||||||||||||||||||
Non-interest bearing deposits | 1,177.5 | 503.6 | 56.9 | ||||||||||||||||||||||||||||||||||||
Credit balances of factoring clients | 1,286.6 | 1,492.4 | 1,368.5 | ||||||||||||||||||||||||||||||||||||
Other non-interest bearing liabilities | 1,689.2 | 1,541.0 | 1,321.9 | ||||||||||||||||||||||||||||||||||||
Liabilities of discontinued operation | 4,236.5 | 3,975.6 | 4,950.4 | ||||||||||||||||||||||||||||||||||||
Noncontrolling interests | 0.5 | (0.9 | ) | 7.0 | |||||||||||||||||||||||||||||||||||
Stockholders’ equity | 11,082.6 | 9,644.6 | 8,830.5 | ||||||||||||||||||||||||||||||||||||
Total Average Liabilities and Stockholders’ Equity | $ | 66,511.6 | $ | 55,438.1 | $ | 46,403.1 | |||||||||||||||||||||||||||||||||
Net revenue spread | 3.58 | % | 3.48 | % | 3.30 | % | |||||||||||||||||||||||||||||||||
Impact of non-interest bearing sources | 0.02 | % | (0.01 | )% | – | ||||||||||||||||||||||||||||||||||
Net revenue / yield on earning assets(2) | $ | 1,715.2 | 3.60 | % | $ | 1,317.6 | 3.47 | % | $ | 988.6 | 3.30 | % |
(1) | The average balances presented are derived based on month end balances during the year. Tax exempt income was not significant in any of the years presented. Average rates are impacted by PAA and FSA accretion and amortization. |
(2) | The rate presented is calculated net of average credit balances for factoring clients. |
(3) | Non-accrual loans and related income are included in the respective categories. |
(4) | Operating lease rental income is a significant source of revenue; therefore, we have presented the rental revenues net of depreciation and net of Maintenance and other operating lease expenses. |
(5) | The interest expense presented pertains only to continuing operations and reflects the allocation of interest expense to discontinued operations. The average rate for borrowings before the allocation of interest expense to discontinued operations was 4.15% for 2016, 4.31% for 2015 and 5.53% for 2014. |
(6) | Interest and expense and average rates include PAA and FSA accretion, including amounts accelerated due to redemptions or extinguishments, and accelerated original issue discount on debt extinguishment related to the TRS Transactions. |
2016 Compared to 2015 | 2015 Compared to 2014 | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Increase (decrease) due to change in: | Increase (decrease) due to change in: | ||||||||||||||||||||||||||
Volume | Rate | Net | Volume | Rate | Net | ||||||||||||||||||||||
Interest Income | |||||||||||||||||||||||||||
Loans (including held for sale and net of credit balances of factoring clients) | $ | 368.8 | $ | 60.5 | $ | 429.3 | $ | 275.0 | $ | (20.6 | ) | $ | 254.4 | ||||||||||||||
Interest bearing deposits | 3.4 | 12.6 | 16.0 | 2.9 | (3.5 | ) | (0.6 | ) | |||||||||||||||||||
Securities purchased under agreements to resell | (1.1 | ) | (1.2 | ) | (2.3 | ) | 0.9 | 0.2 | 1.1 | ||||||||||||||||||
Investments | 31.1 | 15.9 | 47.0 | 7.2 | 28.0 | 35.2 | |||||||||||||||||||||
Interest income | 402.2 | 87.8 | 490.0 | 286.0 | 4.1 | 290.1 | |||||||||||||||||||||
Operating lease equipment, net (including held for sale)(1) | 75.5 | (122.4 | ) | (46.9 | ) | 56.0 | (0.3 | ) | 55.7 | ||||||||||||||||||
Indemnification assets | (1.0 | ) | (22.7 | ) | (23.7 | ) | (0.5 | ) | – | (0.5 | ) | ||||||||||||||||
Interest Expense | |||||||||||||||||||||||||||
Interest on deposits | 114.5 | (49.8 | ) | 64.7 | 131.8 | (32.7 | ) | 99.1 | |||||||||||||||||||
Borrowings | (0.7 | ) | (42.2 | ) | (42.9 | ) | (13.5 | ) | (69.3 | ) | (82.8 | ) | |||||||||||||||
Interest expense | 113.8 | (92.0 | ) | 21.8 | 118.3 | (102.0 | ) | 16.3 | |||||||||||||||||||
Net finance revenue | $ | 362.9 | $ | 34.7 | $ | 397.6 | $ | 223.2 | $ | 105.8 | $ | 329.0 | |||||||||||||||
Loans U.S. and Non-U.S. (including held for sale and net of credit balances of factoring clients): | |||||||||||||||||||||||||||
U.S. | $ | 458.5 | $ | 61.1 | $ | 519.6 | $ | 389.5 | $ | (34.5 | ) | $ | 355.0 | ||||||||||||||
Non-U.S. | (89.7 | ) | (0.6 | ) | (90.3 | ) | (114.5 | ) | 13.9 | (100.6 | ) |
(1) | Operating lease rental income is a significant source of revenue; therefore, we have presented the net revenues. |
Item 7. Management’s Discussion and Analysis of Financial Condition and Results
- | We signed a definitive agreement in October 2016 to sell our Commercial Air business for $10.0 billion, which represents a 6.7% premium to net assets. The transaction is targeted to close by the end of the first quarter of 2017, subject to certain pending conditions described below; and |
- | We sold our U.K. Equipment Finance business in the first quarter of 2016 and our Canada Equipment and Corporate Finance businesses in October 2016. |
- | Our return on tangible common equity (“ROTCE”)(1) excluding noteworthy items for total CIT for the year ended December 31, 2016, was 8%. (ROTCE for the year was not meaningful due to the net loss.); |
- | We met our goal to be about a third of the way through our expense savings target by year end as discussed further below; |
- | We closed two offices, combined systems and integrated OneWest Bank, and addressed certain legacy OneWest Bank issues. |
- | We redeployed cash at CIT Bank, N.A. into higher-yielding “High Quality Liquid Assets.” The year end 2016 investment securities balance increased to $4.5 billion from $3.0 billion at December 31, 2015, while the average yield increased to 2.9% in 2016 from 2.3% in 2015; |
- | We maintained our quarterly dividend at $0.15 per share; and |
- | We received a non-objection from the Federal Reserve Bank of New York to return up to $3.3 billion of capital to shareholders that would occur in conjunction with the Commercial Air separation(2). |
- | We maintained strong regulatory capital ratios; |
- | We maintained solid credit metrics despite some increased provisioning in the maritime and energy portfolios; and |
- | We enhance our capital planning process. |
- | organization simplification: structuring the company to be more efficient while ensuring we have the talent and resources; |
- | third-party efficiencies: includes items such as evaluating vendor agreements, improving processes and reducing travel costs; and |
- | technology and operational improvements:, reengineering processes and automating certain functions, as well as standardizing technology. |
(1) | ROTCE is a non-GAAP measure. See “Non-GAAP Financial Measurements” for reconciliation of non-GAAP to GAAP financial information. |
(2) | Amended capital plan approval authorizes CIT to return $2.975 billion of common equity from the net proceeds of the Commercial Air sale; additional $0.325 billion contingent upon the issuance of a similar amount of Tier 1 qualifying preferred stock. |
(3) | Net income excluding noteworthy items is a non-GAAP measure; see “Non-GAAP Financial Measurements” for a reconciliation of non-GAAP to GAAP financial information. |
(4) | Income from continuing operations excluding noteworthy items is a non- GAAP measure; see “Non-GAAP Financial Measurements” for a reconciliation of non-GAAP to GAAP financial information. |
(5) | Net finance revenue and average earning assets are non-GAAP measures; see “Non-GAAP Financial Measurements” for a reconciliation of non-GAAP to GAAP financial information. |
- | Financing and leasing assets (“FLA”), which includes loans, operating lease equipment and assets held for sale (“AHFS”), decreased to $37.7 billion at December 31, 2016, from $39.4 billion at December 31, 2015, mostly reflecting sales of non-strategic businesses, and was up from $25.1 billion at December 31, 2014, due to the OneWest Bank acquisition of $13.6 billion of FLA in 2015. |
- | Cash (cash and due from banks andinterest bearing deposits) totaled $6.4 billion at December 31, 2016, compared to $7.7 billion at December 31, 2015 and $6.2 billion at December 31, 2014, reflecting the redeployment of cash into investment securities as noted below, while the 2015 increase reflected $4.4 billion of cash acquired in the OneWest Transaction, partially offset by the payment of $1.9 billion as consideration for the OneWest Transaction. |
- | Investment securities andsecurities purchased under resale agreements totaled $4.5 billion at December 31, 2016 compared to $3.0 billion at December 31, 2015, and $2.2 billion at December 31, 2014. The increase in 2016 reflected our 2016 business strategy to redeploy cash at CIT Bank, N.A. into higher-yielding “High Quality Liquid Assets,” and the increase in 2015, reflected $1.3 billion of investment securities, primarily comprised of MBS, acquired in the OneWest Transaction. |
- | Goodwill and Intangible assets decreased in 2016 primarily due to goodwill impairment of $354 million, mostly related to the Consumer Banking segment, and increased in 2015 due to the addition of $663 million of goodwill and $165 million of intangible assets related to the OneWest Transaction. |
- | Other assets of $1.2 billion at December 31, 2016, were down from $2.5 billion, primarily due to the reduction in the deferred tax assets. The components are included inNote 8 —Other Assets inItem 8. Financial Statements and Supplementary Data. |
(dollars in millions) | Year Ended December 31, 2016 | Quarter Ended December 31, 2016 | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
As Reported in Form 8-K | As Adjusted | As Reported in Form 8-K | As Adjusted | ||||||||||||||||
Loss from continuing operations | $ | (195.5 | ) | $ | (182.6 | ) | $ | (424.2 | ) | $ | (425.8 | ) | |||||||
Net loss | $ | (860.9 | ) | $ | (848.0 | ) | $ | (1,154.7 | ) | $ | (1,142.5 | ) | |||||||
Diluted income per common share | |||||||||||||||||||
(Loss) income from continuing operations | $ | (0.97 | ) | $ | (0.90 | ) | $ | (2.10 | ) | $ | (2.10 | ) | |||||||
Diluted (loss) income per common share | $ | (4.27 | ) | $ | (4.20 | ) | $ | (5.71 | ) | $ | (5.65 | ) |
KEY PERFORMANCE INDICATORS | MEASUREMENTS | |||
Asset Generation — originate new business and grow earning assets. | -New business volumes; -Financing and leasing assets (included in earning assets); and Earning asset balances. | |||
Revenue Generation — lend money at rates in excess of borrowing costs and consistent with risk profile of obligor, earn rentals on the equipment we lease commensurate with the risk, and generate other revenue streams. | -Net finance revenue and other income; -Net finance margin; Operating lease revenue as a percentage of average operating lease equipment; and -Asset yields and funding costs. | |||
Credit Risk Management — accurately evaluate credit worthiness of customers, maintain high-quality assets and balance income potential with loss expectations. | -Net charge-offs, amounts and as a percentage of AFR; -Non-accrual loans, balances and as a percentage of loans; -Classified assets and delinquencies balances; and -Loan loss reserve, balance and as a percentage of loans. | |||
Equipment and Residual Risk Management — appropriately evaluate collateral risk in leasing transactions and remarket or sell equipment at lease termination. | -Equipment utilization; -Market value of equipment relative to book value; and -Gains and losses on equipment sales. | |||
Expense Management — maintain efficient operating platforms and related infrastructure. | -SG&A expenses and trends; -SG&A expenses as a percentage of AEA; and -Net efficiency ratio. | |||
Profitability — generate income and appropriate returns to shareholders. | -Net income per common share (EPS); -Net income and pre-tax income, each as a percentage of average earning assets (ROA); and -Net income and pre-tax income as a percentage of average tangible common stockholders’ equity (ROTCE). | |||
Capital Management — maintain a strong capital position, while deploying excess capital. | -Common equity tier 1, Tier 1 and Total capital ratios; -Tier 1 capital as a percentage of adjusted average assets; (“Tier 1 Leverage Ratio”); and -Book value and Tangible book value per share. | |||
Liquidity Management — maintain access to ample funding at competitive rates to meet obligations as they come due. | -Levels of high quality liquid assets and as a % of total assets; -Committed and available funding facilities; -Debt maturity profile and ratings; and -Funding mix. | |||
Manage Market Risk — measure and manage risk to income statement and economic value of enterprise due to movements in interest and foreign currency exchange rates. | -Net Interest Income Sensitivity; and -Economic Value of Equity (EVE). |
DISCONTINUED OPERATIONS
Aircraft Type | Operating Lease Fleet | Order Book | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Airbus A310/319/320/321 | 119 | 50 | ||||||||
Airbus A330 | 40 | 15 | ||||||||
Airbus A350 | 2 | 10 | ||||||||
Boeing 737 | 84 | 37 | ||||||||
Boeing 757 | 7 | – | ||||||||
Boeing 767 | 5 | – | ||||||||
Boeing 787 | 4 | 16 | ||||||||
Embraer 175 | 4 | – | ||||||||
Embraer 190/195 | 16 | – | ||||||||
Other | 1 | – | ||||||||
Total | 282 | 128 |
December 31, 2016 | December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Net Investment | Number | Net Investment | Number | Net Investment | Number | ||||||||||||||||||||||
By Product: | |||||||||||||||||||||||||||
Operating lease(1) | $ | 9,658.7 | 282 | $ | 9,772.2 | 284 | $ | 9,309.3 | 279 | ||||||||||||||||||
Loan | 31.2 | 5 | 49.3 | 9 | 71.5 | 11 | |||||||||||||||||||||
Capital lease | 495.6 | 23 | 320.4 | 21 | 335.6 | 21 | |||||||||||||||||||||
Total | $ | 10,185.5 | 310 | $ | 10,141.9 | 314 | $ | 9,716.4 | 311 |
December 31, 2016 | December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Net Investment | Number | Net Investment | Number | Net Investment | Number | ||||||||||||||||||||||
By Region: | |||||||||||||||||||||||||||
Asia / Pacific | $ | 3,931.0 | 96 | $ | 3,704.2 | 88 | $ | 3,505.9 | 84 | ||||||||||||||||||
U.S. and Canada | 2,087.9 | 64 | 2,091.0 | 65 | 1,802.6 | 57 | |||||||||||||||||||||
Europe | 1,940.0 | 72 | 2,195.4 | 80 | 2,239.4 | 86 | |||||||||||||||||||||
Latin America | 1,056.2 | 35 | 1,152.6 | 38 | 994.9 | 37 | |||||||||||||||||||||
Africa / Middle East | 643.6 | 15 | 629.0 | 13 | 766.5 | 15 | |||||||||||||||||||||
Total | $ | 9,658.7 | 282 | $ | 9,772.2 | 284 | $ | 9,309.3 | 279 | ||||||||||||||||||
By Manufacturer: | |||||||||||||||||||||||||||
Airbus | $ | 6,193.2 | 161 | $ | 6,232.3 | 161 | $ | 5,985.5 | 160 | ||||||||||||||||||
Boeing | 2,891.5 | 100 | 2,929.6 | 101 | 2,711.6 | 98 | |||||||||||||||||||||
Embraer | 530.9 | 20 | 552.7 | 21 | 547.2 | 20 | |||||||||||||||||||||
Other | 43.1 | 1 | 57.6 | 1 | 65.0 | 1 | |||||||||||||||||||||
Total | $ | 9,658.7 | 282 | $ | 9,772.2 | 284 | $ | 9,309.3 | 279 | ||||||||||||||||||
By Body Type(2): | |||||||||||||||||||||||||||
Narrow body | $ | 6,219.8 | 230 | $ | 6,211.4 | 230 | $ | 6,287.8 | 230 | ||||||||||||||||||
Intermediate | 3,396.0 | 51 | 3,502.2 | 52 | 2,955.3 | 47 | |||||||||||||||||||||
Regional and other | 42.9 | 1 | 58.6 | 2 | 66.2 | 2 | |||||||||||||||||||||
Total | $ | 9,658.7 | 282 | $ | 9,772.2 | 284 | $ | 9,309.3 | 279 | ||||||||||||||||||
Number of customers | 101 | 95 | 98 | ||||||||||||||||||||||||
Weighted average age of fleet (years) | 6 | 5 | 5 |
(1) | Includes operating lease equipment held for sale. |
(2) | Narrow body are single aisle design and consist primarily of Boeing 737 and 757 series, Airbus A320 series, and Embraer E170 and E190 aircraft. Intermediate body are smaller twin aisle design and consist primarily of Boeing 767 and 787 series and Airbus A330 series aircraft. Regional and Other includes aircraft and related equipment, such as engines. |
NET FINANCE REVENUE
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Interest income | $ | 1,911.5 | $ | 1,445.2 | $ | 1,155.6 | |||||||||
Rental income on operating leases | 1,031.6 | 1,018.1 | 949.6 | ||||||||||||
Finance revenue | 2,943.1 | 2,463.3 | 2,105.2 | ||||||||||||
Interest expense | (753.2 | ) | (731.4 | ) | (715.1 | ) | |||||||||
Depreciation on operating lease equipment | (261.1 | ) | (229.2 | ) | (229.8 | ) | |||||||||
Maintenance and other operating lease expenses | (213.6 | ) | (185.1 | ) | (171.7 | ) | |||||||||
Net finance revenue | $ | 1,715.2 | $ | 1,317.6 | $ | 988.6 | |||||||||
Average Earning Assets(2) (“AEA”) | $ | 47,664.2 | $ | 38,019.8 | $ | 29,959.3 | |||||||||
Net finance margin (“NFM”) | 3.60 | % | 3.47 | % | 3.30 | % |
(1) | NFR and AEA are non-GAAP measures; see “Non-GAAP Financial Measurements” sections for a reconciliation of non-GAAP to GAAP financial information. |
(2) | AEA balances in this table are net of credit balances of factoring clients; and therefore, are less than balances in Item 6. Selected Financial Data referred to as interest earning assets. |
December 31, 2016 | December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Average Balance | Revenue / Expense | Average Rate (%) | Average Balance | Revenue / Expense | Average Rate (%) | Average Balance | Revenue / Expense | Average Rate (%) | |||||||||||||||||||||||||||||||
Cash / interest bearing deposits | $ | 6,450.6 | $ | 33.1 | 0.51 | % | $ | 5,486.6 | $ | 17.1 | 0.31 | % | $ | 4,652.5 | $ | 17.7 | 0.38 | % | |||||||||||||||||||||
Securities purchased under agreements to resell | – | – | – | 411.5 | 2.3 | 0.56 | % | 242.3 | 1.2 | 0.50 | % | ||||||||||||||||||||||||||||
Investment securities | 3,384.0 | 98.8 | 2.92 | % | 2,239.3 | 51.8 | 2.31 | % | 1,667.6 | 16.6 | 1.00 | % | |||||||||||||||||||||||||||
Loans (including held for sale and credit balances of factoring clients)(2)(3) | 30,233.0 | 1,803.8 | 5.97 | % | 23,334.2 | 1,374.5 | 5.89 | % | 17,626.9 | 1,120.1 | 6.35 | % | |||||||||||||||||||||||||||
Operating lease equipment, net (including held for sale)(4) | 7,222.8 | 556.9 | 7.71 | % | 6,359.6 | 603.8 | 9.49 | % | 5,769.9 | 548.1 | 9.50 | % | |||||||||||||||||||||||||||
Indemnification assets | 373.8 | (24.2 | ) | (6.47 | )% | 188.6 | (0.5 | ) | (0.27 | )% | – | – | – | ||||||||||||||||||||||||||
Average earning assets(2) | $ | 47,664.2 | 2,468.4 | 5.18 | % | $ | 38,019.8 | 2,049.0 | 5.39 | % | $ | 29,959.2 | 1,703.7 | 5.69 | % | ||||||||||||||||||||||||
Deposits | $ | 31,545.1 | $ | 394.8 | 1.25 | % | $ | 22,762.7 | $ | 330.1 | 1.45 | % | $ | 13,890.9 | $ | 231.0 | 1.66 | % | |||||||||||||||||||||
Borrowings(5) | 15,493.6 | 358.4 | 2.31 | % | 15,519.1 | 401.3 | 2.59 | % | 15,977.0 | 484.1 | 3.03 | % | |||||||||||||||||||||||||||
Total interest-bearing liabilities | $ | 47,038.7 | 753.2 | 1.60 | % | $ | 38,281.8 | 731.4 | 1.91 | % | $ | 29,867.9 | 715.1 | 2.39 | % | ||||||||||||||||||||||||
NFR and NFM | $ | 1,715.2 | 3.60 | % | $ | 1,317.6 | 3.47 | % | $ | 988.6 | 3.30 | % |
2016 Over 2015 Comparison | 2015 Over 2014 Comparison | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Increase (Decrease) Due To Change In: | Increase (Decrease) Due To Change In: | ||||||||||||||||||||||||||
Volume | Rate | Net | Volume | Rate | Net | ||||||||||||||||||||||
Interest bearing deposits | $ | 3.4 | $ | 12.6 | $ | 16.0 | $ | 2.9 | $ | (3.5 | ) | $ | (0.6 | ) | |||||||||||||
Securities purchased under agreements to resell | (1.1 | ) | (1.2 | ) | (2.3 | ) | 0.9 | 0.2 | 1.1 | ||||||||||||||||||
Investments | 31.1 | 15.9 | 47.0 | 7.2 | 28.0 | 35.2 | |||||||||||||||||||||
Loans (including held for sale and net of credit balances of factoring clients)(2)(3) | 368.8 | 60.5 | 429.3 | 275.0 | (20.6 | ) | 254.4 | ||||||||||||||||||||
Operating lease equipment, net (including held for sale)(4) | 75.5 | (122.4 | ) | (46.9 | ) | 56.0 | (0.3 | ) | 55.7 | ||||||||||||||||||
Indemnification assets | (1.0 | ) | (22.7 | ) | (23.7 | ) | (0.5 | ) | — | (0.5 | ) | ||||||||||||||||
Total | $ | 476.7 | $ | (57.3 | ) | $ | 419.4 | $ | 341.5 | $ | 3.8 | $ | 345.3 | ||||||||||||||
Deposits | $ | 114.5 | $ | (49.8 | ) | $ | 64.7 | $ | 131.8 | $ | (32.7 | ) | $ | 99.1 | |||||||||||||
Borrowings(5) | (0.7 | ) | (42.2 | ) | (42.9 | ) | (13.5 | ) | (69.3 | ) | (82.8 | ) | |||||||||||||||
Total | $ | 113.8 | $ | (92.0 | ) | $ | 21.8 | $ | 118.3 | $ | (102.0 | ) | $ | 16.3 |
(1) | Interest and average rates include PAA and FSA accretion, including amounts accelerated due to redemptions or extinguishments, and accelerated original issue discount on debt extinguishment related to the TRS Transactions. |
(2) | The balance and rate presented is calculated net of average credit balances for factoring clients. |
(3) | Non-accrual loans and related income are included in the respective categories. |
(4) | Operating lease rental income is a significant source of revenue; therefore, we have presented the rental revenues net of depreciation and net of maintenance and other operating lease expenses. |
(5) | The interest expense presented pertains only to continuing operations and reflects allocation of interest expense to discontinued operations. As detailed in a forthcoming table, the average rate for borrowings before the allocation of interest expense to discontinued operations was 4.15% for 2016, 4.31% for 2015 and 5.53% for 2014. |
December 31, 2016 | December 31, 2015 | December 31, 2014 | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Deposits | 68 | % | 67 | % | 50 | % | |||||||||
Unsecured | 23 | % | 22 | % | 37 | % | |||||||||
Secured Borrowings: | |||||||||||||||
Structured financings | 4 | % | 5 | % | 12 | % | |||||||||
FHLB Advances | 5 | % | 6 | % | 1 | % |
Year Ended December 31, 2016 | Year Ended December 31, 2015 | Year Ended December 31, 2014 | |||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Average Balance | Interest Expense | Rate % | Average Balance | Interest Expense | Rate % | Average Balance | Interest Expense | Rate % | |||||||||||||||||||||||||||||||
Deposits | |||||||||||||||||||||||||||||||||||||||
CDs | $ | 17,981.1 | $ | 291.1 | 1.62 | % | $ | 13,799.9 | $ | 252.4 | 1.83 | % | $ | 8,672.0 | $ | 180.1 | 2.08 | % | |||||||||||||||||||||
Interest-bearing checking | 2,534.8 | 15.0 | 0.59 | % | 1,308.3 | 6.8 | 0.52 | % | – | – | – | ||||||||||||||||||||||||||||
Savings | 4,517.4 | 40.0 | 0.89 | % | 4,301.6 | 42.1 | 0.98 | % | 3,361.7 | 32.1 | 0.95 | % | |||||||||||||||||||||||||||
Money markets | 6,511.8 | 48.7 | 0.75 | % | 3,352.9 | 28.8 | 0.86 | % | 1,857.2 | 18.8 | 1.01 | % | |||||||||||||||||||||||||||
Total deposits* | 31,545.1 | 394.8 | 1.25 | % | 22,762.7 | 330.1 | 1.45 | % | 13,890.9 | 231.0 | 1.66 | % | |||||||||||||||||||||||||||
Borrowings | |||||||||||||||||||||||||||||||||||||||
Unsecured notes | 10,600.5 | 553.3 | 5.22 | % | 10,855.6 | 561.3 | 5.17 | % | 12,371.0 | 639.3 | 5.17 | % | |||||||||||||||||||||||||||
Secured borrowings | 4,316.4 | 161.0 | 3.73 | % | 5,686.3 | 205.2 | 3.61 | % | 6,829.1 | 430.0 | 6.30 | % | |||||||||||||||||||||||||||
FHLB advances | 2,865.3 | 24.1 | 0.84 | % | 1,374.6 | 5.7 | 0.41 | % | 151.0 | 0.6 | 0.40 | % | |||||||||||||||||||||||||||
Total borrowings | 17,782.2 | 738.4 | 4.15 | % | 17,916.5 | 772.2 | 4.31 | % | 19,351.1 | 1,069.9 | 5.53 | % | |||||||||||||||||||||||||||
Allocated to Discontinued Operations | (2,288.6 | ) | (380.0 | ) | (2,397.4 | ) | (370.9 | ) | (3,374.1 | ) | (585.8 | ) | |||||||||||||||||||||||||||
Total Borrowings** | 15,493.6 | 358.4 | 2.31 | % | 15,519.1 | 401.3 | 2.59 | % | 15,977.0 | 484.1 | 3.03 | % | |||||||||||||||||||||||||||
Total interest-bearing liabilities | $ | 47,038.7 | $ | 753.2 | 1.60 | % | $ | 38,281.8 | $ | 731.4 | 1.91 | % | $ | 29,867.9 | $ | 715.1 | 2.39 | % |
* | Excludes certain deposits such as escrow accounts, security deposits, and other similar accounts, therefore totals may differ from other average balances included in this document. |
** | The interest expense presented pertains only to continuing operations and reflects allocation of interest expense to discontinued operations. As detailed, the average rate for borrowings before the allocation of interest expense to discontinued operations was 4.15% for 2016, 4.31% for 2015 and 5.53% for 2014. |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Commercial Banking | |||||||||||||||
AEA | $ | 29,762.9 | $ | 25,339.6 | $ | 20,833.7 | |||||||||
NFR | 1,314.1 | 1,125.7 | 927.2 | ||||||||||||
Gross yield | 7.75 | % | 7.93 | % | 8.36 | % | |||||||||
NFM | 4.42 | % | 4.44 | % | 4.45 | % | |||||||||
AEA | |||||||||||||||
Commercial Finance | $ | 11,289.3 | $ | 10,047.9 | $ | 8,174.0 | |||||||||
Rail | 7,089.3 | 6,245.5 | 5,651.6 | ||||||||||||
Real Estate Finance | 5,453.7 | 3,216.6 | 1,687.6 | ||||||||||||
Business Capital | 5,930.6 | 5,829.6 | 5,320.5 | ||||||||||||
Gross yield | |||||||||||||||
Commercial Finance | 5.36 | % | 4.87 | % | 5.28 | % | |||||||||
Rail | 12.86 | % | 14.34 | % | 14.57 | % | |||||||||
Real Estate Finance | 5.25 | % | 4.80 | % | 4.15 | % | |||||||||
Business Capital | 8.52 | % | 8.09 | % | 7.82 | % | |||||||||
NFR | |||||||||||||||
Commercial Finance | $ | 447.7 | $ | 338.2 | $ | 284.7 | |||||||||
Rail | 349.9 | 382.1 | 339.0 | ||||||||||||
Real Estate Finance | 209.8 | 109.5 | 44.0 | ||||||||||||
Business Capital | 306.7 | 295.9 | 259.5 | ||||||||||||
NFM | |||||||||||||||
Commercial Finance | 3.97 | % | 3.37 | % | 3.48 | % | |||||||||
Rail | 4.94 | % | 6.12 | % | 6.00 | % | |||||||||
Real Estate Finance | 3.85 | % | 3.40 | % | 2.61 | % | |||||||||
Business Capital | 5.17 | % | 5.08 | % | 4.88 | % | |||||||||
Consumer Banking | |||||||||||||||
AEA | $ | 7,527.4 | $ | 3,202.4 | – | ||||||||||
NFR | 410.6 | 151.2 | – | ||||||||||||
Gross yield | 5.59 | % | 5.50 | % | – | ||||||||||
NFM | 5.45 | % | 4.72 | % | – | ||||||||||
AEA | |||||||||||||||
Legacy Consumer Mortgages | $ | 5,558.8 | $ | 2,511.3 | – | ||||||||||
All Other Consumer Banking | 1,968.6 | 691.1 | – | ||||||||||||
Gross yield | |||||||||||||||
Legacy Consumer Mortgages | 6.28 | % | 6.00 | % | – | ||||||||||
All Other Consumer Banking | 3.65 | % | 3.68 | % | – | ||||||||||
NFR | |||||||||||||||
Legacy Consumer Mortgages | $ | 252.9 | $ | 109.6 | – | ||||||||||
All Other Consumer Banking | 157.7 | 41.6 | – | ||||||||||||
NFM | |||||||||||||||
Legacy Consumer Mortgages | 4.55 | % | 4.36 | % | – | ||||||||||
All Other Consumer Banking | 8.01 | % | 6.02 | % | – | ||||||||||
Non-Strategic Portfolios | |||||||||||||||
AEA | $ | 1,175.6 | $ | 2,375.7 | $ | 3,955.4 | |||||||||
NFR | 45.2 | 89.2 | 102.0 | ||||||||||||
Gross yield | 7.86 | % | 9.32 | % | 8.83 | % | |||||||||
NFM | 3.84 | % | 3.75 | % | 2.58 | % |
Years Ended | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2016 PAA Accretion Recognized in: | December 31, 2015 PAA Accretion Recognized in: | ||||||||||||||||||||||||||
Interest Income(1) | Interest Expense(2) | NFR | Interest Income(1) | Interest Expense(2) | NFR | ||||||||||||||||||||||
Commercial Banking | |||||||||||||||||||||||||||
Commercial Finance | $ | 75.8 | $ | 2.2 | $ | 78.0 | $ | 35.4 | $ | 2.0 | $ | 37.4 | |||||||||||||||
Real Estate Finance | 71.6 | – | 71.6 | 27.9 | – | 27.9 | |||||||||||||||||||||
Total Commercial Banking | 147.4 | 2.2 | 149.6 | 63.3 | 2.0 | 65.3 | |||||||||||||||||||||
Consumer Banking | |||||||||||||||||||||||||||
Other Consumer Banking | 2.8 | 9.0 | 11.8 | (0.3 | ) | 6.2 | 5.9 | ||||||||||||||||||||
Legacy Consumer Mortgages | 126.6 | – | 126.6 | 47.4 | – | 47.4 | |||||||||||||||||||||
Total Consumer Banking | 129.4 | 9.0 | 138.4 | 47.1 | 6.2 | 53.3 | |||||||||||||||||||||
Corporate and Other | – | 4.2 | 4.2 | – | 3.6 | 3.6 | |||||||||||||||||||||
Total CIT | $ | 276.8 | $ | 15.4 | $ | 292.2 | $ | 110.4 | $ | 11.8 | $ | 122.2 |
(1) | Loans acquired in the OneWest Bank acquisition were recorded at a net discount, therefore the purchase accounting accretion of that adjustment increases interest income. Included in the above are accelerated recognition of approximately $96.4 million for 2016 and $26.0 million for 2015. |
(2) | Debt and deposits acquired in the OneWest Bank acquisition were recorded at a net premium, therefore the purchase accounting accretion of that adjustment decreases interest expense. |
Years Ended December 31, | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||||||||||||||
Rental income on operating leases | $ | 1,031.6 | 14.35 | % | $ | 1,018.1 | 16.13 | % | $ | 949.6 | 16.57 | % | |||||||||||||||
Depreciation on operating lease equipment | (261.1 | ) | (3.63 | )% | (229.2 | ) | (3.63 | )% | (229.8 | ) | (4.01 | )% | |||||||||||||||
Maintenance and other operating lease expenses | (213.6 | ) | (2.97 | )% | (185.1 | ) | (2.93 | )% | (171.7 | ) | (3.00 | )% | |||||||||||||||
Net operating lease revenue and % | $ | 556.9 | 7.75 | % | $ | 603.8 | 9.57 | % | $ | 548.1 | 9.56 | % | |||||||||||||||
Average Operating Lease Equipment (“AOL”) | $ | 7,188.6 | $ | 6,311.2 | $ | 5,732.1 |
CREDIT METRICS
of reserves on certain acquired non-credit impaired loans in the initial period post acquisition.
Years ended December 31, | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Allowance – beginning of period | $ | 347.0 | $ | 334.2 | $ | 339.1 | $ | 353.0 | $ | 390.3 | |||||||||||||
Provision for credit losses(1) | 194.7 | 158.6 | 104.4 | 75.3 | 41.7 | ||||||||||||||||||
Other(1) | 2.2 | (9.1 | ) | (10.7 | ) | (7.3 | ) | (5.8 | ) | ||||||||||||||
Net additions | 196.9 | 149.5 | 93.7 | 68.0 | 35.9 | ||||||||||||||||||
Gross charge-offs(2) | (136.6 | ) | (165.1 | ) | (126.8 | ) | (138.6 | ) | (140.8 | ) | |||||||||||||
Recoveries | 25.3 | 28.4 | 28.2 | 56.7 | 67.6 | ||||||||||||||||||
Net Charge-offs | (111.3 | ) | (136.7 | ) | (98.6 | ) | (81.9 | ) | (73.2 | ) | |||||||||||||
Allowance – end of period | $ | 432.6 | $ | 347.0 | $ | 334.2 | $ | 339.1 | $ | 353.0 | |||||||||||||
Provision for credit losses | |||||||||||||||||||||||
Specific allowance – impaired loans impaired loans | $ | 33.7 | $ | 18.1 | $ | (15.3 | ) | $ | (3.0 | ) | $ | (14.1 | ) | ||||||||||
Non-specific allowance | 161.0 | 140.5 | 119.7 | 78.3 | 55.8 | ||||||||||||||||||
Total | $ | 194.7 | $ | 158.6 | $ | 104.4 | $ | 75.3 | $ | 41.7 | |||||||||||||
Allowance for loan losses | |||||||||||||||||||||||
Specific reserves on impaired loans | $ | 33.7 | $ | 27.4 | $ | 12.4 | $ | 29.8 | $ | 36.3 | |||||||||||||
Non-specific reserves | 398.9 | 319.6 | 321.8 | 309.3 | 316.7 | ||||||||||||||||||
Total | $ | 432.6 | $ | 347.0 | $ | 334.2 | $ | 339.1 | $ | 353.0 | |||||||||||||
Ratio | |||||||||||||||||||||||
Allowance for loan losses as a percentage of total loans | 1.46 | % | 1.14 | % | 1.83 | % | 1.91 | % | 2.17 | % | |||||||||||||
Allowance for loan losses as a percent of finance receivable / Commercial | 1.81 | % | 1.44 | % | 1.83 | % | 1.91 | % | 2.17 | % | |||||||||||||
Allowance for loan losses plus principal loss discount as a percent of finance receivables (before the principal loss discount) / Commercial | 1.97 | % | 1.82 | % | 1.83 | % | 1.91 | % | 2.17 | % | |||||||||||||
Allowance for loan losses plus principal loss discount as a percent of finance receivables (before the principal loss discount) / Consumer | 6.05 | % | 8.63 | % | – | – | – |
(1) | The provision for credit losses includes amounts related to reserves on unfunded loan commitments, unused letters of credit, and for deferred purchase agreements, all of which are reflected in other liabilities. The items included in other liabilities totaled $44 million, $43 million, $35 million, $28 million and $23 million at December 31, 2016, 2015, 2014, 2013 and 2012, respectively. “Other” also includes allowance for loan losses associated with loan sales and foreign currency translations. |
(2) | Gross charge-offs included $41 million, $73 million, $43 million, and $39 million of charge-offs related to the transfer of receivables to assets held for sale for the years ended December 31, 2016, 2015, 2014 and 2013, respectively. Prior year amounts were not significant. |
at December 31, 2015, as most of the consumer loans purchased were credit impaired and are partially covered by loss sharing agreements with the FDIC. The decrease was driven by the shift in asset mix as new originations offset the run-off of the purchased credit impaired portfolio. The decline in the percentage of allowance to finance receivables in 2015 compared to the prior years reflects the OneWest Transaction, which added $13.6 billion of loans at fair value with no related allowance at the time of acquisition.
Finance Receivables | Allowance for Loan Losses | Net Carrying Value | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2016 | |||||||||||||||
Commercial Banking | $ | 22,562.3 | $ | (408.4 | ) | $ | 22,153.9 | ||||||||
Consumer Banking | 6,973.6 | (24.2 | ) | 6,949.4 | |||||||||||
Total | $ | 29,535.9 | $ | (432.6 | ) | $ | 29,103.3 | ||||||||
December 31, 2015 | |||||||||||||||
Commercial Banking | $ | 23,332.4 | $ | (336.8 | ) | $ | 22,995.6 | ||||||||
Consumer Banking | 7,186.3 | (10.2 | ) | 7,176.1 | |||||||||||
Total | $ | 30,518.7 | $ | (347.0 | ) | $ | 30,171.7 | ||||||||
December 31, 2014 | |||||||||||||||
Commercial Banking | $ | 16,727.8 | $ | (296.7 | ) | $ | 16,431.1 | ||||||||
Non-Strategic Portfolio | 1,532.8 | (37.5 | ) | 1,495.3 | |||||||||||
Total | $ | 18,260.6 | $ | (334.2 | ) | $ | 17,926.4 | ||||||||
December 31, 2013 | |||||||||||||||
Commercial Banking | $ | 14,556.6 | $ | (283.1 | ) | $ | 14,273.5 | ||||||||
Non-Strategic Portfolio | 3,188.7 | (56.0 | ) | 3,132.7 | |||||||||||
Total | $ | 17,745.3 | $ | (339.1 | ) | $ | 17,406.2 | ||||||||
December 31, 2012 | |||||||||||||||
Commercial Banking | $ | 12,394.6 | $ | (265.8 | ) | $ | 12,128.8 | ||||||||
Non-Strategic Portfolio | 3,909.9 | (87.2 | ) | 3,822.7 | |||||||||||
Total | $ | 16,304.5 | $ | (353.0 | ) | $ | 15,951.5 |
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gross Charge-offs | |||||||||||||||||||||||||||||||||||||||||||
Commercial Finance | $ | 62.2 | 0.57 | % | $ | 59.5 | 0.61 | % | $ | 29.7 | 0.38 | % | $ | 21.8 | 0.31 | % | $ | 37.6 | 0.61 | % | |||||||||||||||||||||||
Real Estate Finance | 1.6 | 0.03 | % | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||
Business Capital | 70.0 | 1.05 | % | 53.5 | 0.81 | % | 39.6 | 0.67 | % | 31.9 | 0.59 | % | 48.5 | 0.99 | % | ||||||||||||||||||||||||||||
Commercial Banking(1) | 133.8 | 0.58 | % | 113.0 | 0.57 | % | 69.3 | 0.44 | % | 53.7 | 0.39 | % | 86.1 | 0.75 | % | ||||||||||||||||||||||||||||
Legacy Consumer Mortgages | 2.8 | 0.04 | % | 1.3 | 0.04 | % | – | – | – | – | – | – | |||||||||||||||||||||||||||||||
Consumer Banking | 2.8 | 0.04 | % | 1.3 | 0.04 | % | – | – | – | – | – | – | |||||||||||||||||||||||||||||||
Non-Strategic Portfolio(2) | – | – | 50.8 | 5.17 | % | 57.5 | 2.35 | % | 84.9 | 2.31 | % | 54.7 | 1.44 | % | |||||||||||||||||||||||||||||
Total | $ | 136.6 | 0.45 | % | $ | 165.1 | 0.70 | % | $ | 126.8 | 0.70 | % | $ | 138.6 | 0.80 | % | $ | 140.8 | 0.92 | % | |||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||||
Commercial Finance | $ | (2.1 | ) | (0.02 | )% | $ | (3.7 | ) | (0.04 | )% | $ | (0.6 | ) | (0.01 | )% | $ | (7.2 | ) | (0.11 | )% | $ | (5.8 | ) | (0.10 | )% | ||||||||||||||||||
Business Capital | (20.0 | ) | (0.30 | )% | (13.9 | ) | (0.21 | )% | (16.9 | ) | (0.29 | )% | (24.0 | ) | (0.44 | )% | (35.2 | ) | (0.72 | )% | |||||||||||||||||||||||
Commercial Banking(1) | (22.1 | ) | (0.10 | )% | (17.6 | ) | (0.09 | )% | (17.5 | ) | (0.11 | )% | (31.2 | ) | (0.23 | )% | (41.0 | ) | (0.36 | )% | |||||||||||||||||||||||
Legacy Consumer Mortgages | (3.1 | ) | (0.04 | )% | (1.1 | ) | (0.03 | )% | – | – | – | – | – | – | |||||||||||||||||||||||||||||
Consumer Banking | (3.1 | ) | (0.04 | )% | (1.1 | ) | (0.03 | )% | – | – | – | – | – | – | |||||||||||||||||||||||||||||
Non-Strategic Portfolio(2) | (0.1 | ) | – | (9.7 | ) | (0.98 | )% | (10.7 | ) | (0.44 | )% | (25.5 | ) | (0.70 | )% | (26.6 | ) | (0.70 | )% | ||||||||||||||||||||||||
Total | $ | (25.3 | ) | (0.08 | )% | $ | (28.4 | ) | (0.12 | )% | $ | (28.2 | ) | (0.15 | )% | $ | (56.7 | ) | (0.33 | )% | $ | (67.6 | ) | (0.44 | )% | ||||||||||||||||||
Net Charge-offs | |||||||||||||||||||||||||||||||||||||||||||
Commercial Finance | $ | 60.1 | 0.55 | % | $ | 55.8 | 0.57 | % | $ | 29.1 | 0.37 | % | $ | 14.6 | 0.20 | % | $ | 31.8 | 0.51 | % | |||||||||||||||||||||||
Real Estate Finance | 1.6 | 0.03 | % | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||
Business Capital | 50.0 | 0.75 | % | 39.6 | 0.60 | % | 22.7 | 0.38 | % | 7.9 | 0.15 | % | 13.3 | 0.27 | % | ||||||||||||||||||||||||||||
Commercial Banking(1) | 111.7 | 0.48 | % | 95.4 | 0.48 | % | 51.8 | 0.33 | % | 22.5 | 0.16 | % | 45.1 | 0.39 | % | ||||||||||||||||||||||||||||
Legacy Consumer Mortgages | (0.3 | ) | – | 0.2 | 0.01 | % | – | – | – | – | – | – | |||||||||||||||||||||||||||||||
Consumer Banking | (0.3 | ) | – | 0.2 | 0.01 | % | – | – | – | – | – | – | |||||||||||||||||||||||||||||||
Non-Strategic Portfolio(2) | (0.1 | ) | – | 41.1 | 4.19 | % | 46.8 | 1.91 | % | 59.4 | 1.61 | % | 28.1 | 0.74 | % | ||||||||||||||||||||||||||||
Total | $ | 111.3 | 0.37 | % | $ | 136.7 | 0.58 | % | $ | 98.6 | 0.55 | % | $ | 81.9 | 0.47 | % | $ | 73.2 | 0.48 | % |
(1) | Commercial Banking charge-offs for 2016, 2015, 2014, 2013 and 2012 included approximately $41 million, $33 million, $18 million, $5 million and $3 million, respectively, related to the transfer of receivables to assets held for sale. |
(2) | NSP charge-offs for 2016, 2015, 2014, 2013 and 2012 included approximately $0 million, $40 million, $24 million, $34 million and $0, respectively, related to the transfer of receivables to assets held for sale. |
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Non-accrual loans | |||||||||||||||||||||||
U.S. | $ | 218.9 | $ | 185.3 | $ | 71.8 | $ | 176.3 | $ | 271.0 | |||||||||||||
Foreign | 59.7 | 67.0 | 88.6 | 50.1 | 27.6 | ||||||||||||||||||
Non-accrual loans | $ | 278.6 | $ | 252.3 | $ | 160.4 | $ | 226.4 | $ | 298.6 | |||||||||||||
Troubled Debt Restructurings | |||||||||||||||||||||||
U.S. | $ | 41.7 | $ | 26.4 | $ | 13.5 | $ | 216.2 | $ | 263.3 | |||||||||||||
Foreign | 40.6 | 4.6 | 3.7 | 2.9 | 25.9 | ||||||||||||||||||
Restructured loans | $ | 82.3 | $ | 31.0 | $ | 17.2 | $ | 219.1 | $ | 289.2 | |||||||||||||
Accruing loans past due 90 days or more | |||||||||||||||||||||||
Accruing loans past due 90 days or more | $ | 32.0 | $ | 15.8 | $ | 10.3 | $ | 9.9 | $ | 3.4 |
2016 | 2015 | 2014 | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Commercial Finance | $ | 188.8 | 1.90 | % | $ | 131.5 | 1.15 | % | $ | 30.8 | 0.38 | % | |||||||||||||||
Real Estate Finance | 20.4 | 0.37 | % | 3.6 | 0.07 | % | – | – | |||||||||||||||||||
Business Capital | 41.7 | 0.60 | % | 56.0 | 0.86 | % | 57.7 | 0.87 | % | ||||||||||||||||||
Commercial Banking | 250.9 | 1.11 | % | 191.1 | 0.82 | % | 88.5 | 0.53 | % | ||||||||||||||||||
Legacy Consumer Mortgages | 17.3 | 0.36 | % | 4.8 | 0.09 | % | – | – | |||||||||||||||||||
Other Consumer Banking | 0.1 | 0.00 | %�� | 0.4 | 0.02 | % | – | – | |||||||||||||||||||
Consumer Banking | 17.4 | 0.25 | % | 5.2 | 0.07 | % | – | – | |||||||||||||||||||
Non-Strategic Portfolio | 10.3 | NM | 56.0 | NM | 71.9 | 4.69 | % | ||||||||||||||||||||
Total | $ | 278.6 | 0.94 | % | $ | 252.3 | 0.83 | % | $ | 160.4 | 0.88 | % |
2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
U.S. | Foreign | Total | U.S. | Foreign | Total | U.S. | Foreign | Total | |||||||||||||||||||||||||||||||
Interest revenue that would have been earned at original terms | $ | 24.5 | $ | 4.0 | $ | 28.5 | $ | 23.7 | $ | 9.4 | $ | 33.1 | $ | 22.8 | $ | 12.4 | $ | 35.2 | |||||||||||||||||||||
Less: Interest recorded | (6.8 | ) | (0.2 | ) | (7.0 | ) | (5.9 | ) | (3.2 | ) | (9.1 | ) | (6.7 | ) | (4.2 | ) | (10.9 | ) | |||||||||||||||||||||
Foregone interest revenue | $ | 17.7 | $ | 3.8 | $ | 21.5 | $ | 17.8 | $ | 6.2 | $ | 24.0 | $ | 16.1 | $ | 8.2 | $ | 24.3 |
2016 | 2015 | 2014 | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
% Compliant | % Compliant | % Compliant | |||||||||||||||||||||||||
Troubled Debt Restructurings | |||||||||||||||||||||||||||
Deferral of principal and/or interest | $ | 9.6 | 99 | % | $ | 23.0 | 99 | % | $ | 6.0 | 96 | % | |||||||||||||||
Covenant relief and other | 72.7 | 95 | % | 8.0 | 90 | % | 11.2 | 58 | % | ||||||||||||||||||
Total TDRs | $ | 82.3 | 84 | % | $ | 31.0 | 86 | % | $ | 17.2 | 88 | % | |||||||||||||||
Percent non-accrual | 41 | % | 84 | % | 75 | % | |||||||||||||||||||||
Modifications(1) | |||||||||||||||||||||||||||
Extended maturity | $ | 95.0 | 100 | % | $ | 0.2 | 100 | % | $ | 0.4 | 100 | % | |||||||||||||||
Covenant relief | 261.1 | 100 | % | 65.6 | 100 | % | – | – | |||||||||||||||||||
Interest rate increase | 138.2 | 100 | % | 43.0 | 100 | % | 62.1 | 100 | % | ||||||||||||||||||
Other | 216.0 | 92 | % | 138.1 | 96 | % | 91.9 | 100 | % | ||||||||||||||||||
Total Modifications | $ | 710.3 | $ | 246.9 | $ | 154.4 | |||||||||||||||||||||
Percent non-accrual | 23 | % | 16 | % | 10 | % |
(1) | Table depicts the predominant element of each modification, which may contain several of the characteristics listed. |
NON-INTEREST INCOME
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Rental income on operating leases | $ | 1,031.6 | $ | 1,018.1 | $ | 949.6 | |||||||||
Other Income: | |||||||||||||||
Fee revenues | 111.6 | 105.7 | 92.4 | ||||||||||||
Factoring commissions | 105.0 | 116.5 | 120.2 | ||||||||||||
Net gains (losses) on derivatives and foreign currency exchange | 55.9 | (37.9 | ) | (51.8 | ) | ||||||||||
Gains on sales of leasing equipment | 51.1 | 57.0 | 59.6 | ||||||||||||
Gain on investments | 34.6 | 0.9 | 38.3 | ||||||||||||
Gains (losses) on loan and portfolio sales | 34.2 | (47.2 | ) | 34.3 | |||||||||||
Gains (losses) on OREO sales | 10.2 | (5.4 | ) | – | |||||||||||
Impairment on assets held for sale | (36.6 | ) | (55.9 | ) | (81.2 | ) | |||||||||
Termination fees on Canadian total return swap | (280.8 | ) | – | – | |||||||||||
Other revenues | 65.4 | 15.9 | 52.1 | ||||||||||||
Total other income | 150.6 | 149.6 | 263.9 | ||||||||||||
Total non-interest income | $ | 1,182.2 | $ | 1,167.7 | $ | 1,213.5 |
liquidating portfolios in the NSP segment. Gains in 2015 were driven by sales of $342 million of equipment. $49 million of the gain was attributed to sales on $217 million in Commercial Banking. Most of the 2015 gain was due to rail equipment, while the vast majority of the equipment sold was in the Business Capital division. The remaining gain of $8 million and volume sold of $125 million was in the NSP segment. Gains in 2014 were driven by sales of $443 million of equipment. $43 million of the gain was attributed to sales of $243 million of equipment in Commercial Banking. About half of the Commercial Banking gain in 2014 was on sales of rail equipment, while the other half was split between Business Capital and Commercial Finance divisions. The remaining gain of $17 million and volume sold of $200 million was in the NSP segment. Gains as a percentage of equipment sold will vary based on the type and age of equipment sold.
EXPENSES
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Depreciation on operating lease equipment | $ | (261.1 | ) | $ | (229.2 | ) | $ | (229.8 | ) | ||||||
Maintenance and other operating lease expenses | (213.6 | ) | (185.1 | ) | (171.7 | ) | |||||||||
Operating expenses: | |||||||||||||||
Compensation and benefits | (585.5 | ) | (549.6 | ) | (495.1 | ) | |||||||||
Professional fees | (175.8 | ) | (135.0 | ) | (75.3 | ) | |||||||||
Technology | (133.7 | ) | (109.2 | ) | (84.5 | ) | |||||||||
Insurance | (96.5 | ) | (61.6 | ) | (45.3 | ) | |||||||||
Net occupancy expense | (71.9 | ) | (49.1 | ) | (33.7 | ) | |||||||||
Advertising and marketing | (20.5 | ) | (30.4 | ) | (33.2 | ) | |||||||||
Other | (137.8 | ) | (114.6 | ) | (100.2 | ) | |||||||||
Operating expenses, excluding restructuring costs and intangible asset amortization | (1,221.7 | ) | (1,049.5 | ) | (867.3 | ) | |||||||||
Provision for severance and facilities exiting activities | (36.2 | ) | (58.3 | ) | (31.4 | ) | |||||||||
Intangible assets amortization | (25.6 | ) | (13.3 | ) | (1.4 | ) | |||||||||
Total operating expenses | (1,283.5 | ) | (1,121.1 | ) | (900.1 | ) | |||||||||
Goodwill impairment | (354.2 | ) | – | – | |||||||||||
Loss on debt extinguishments and deposit redemptions | (12.5 | ) | (1.5 | ) | (3.5 | ) | |||||||||
Total non-interest expenses | $ | (2,124.9 | ) | $ | (1,536.9 | ) | $ | (1,305.1 | ) | ||||||
Headcount (continuing operations) | 4,080 | 4,460 | 3,220 | ||||||||||||
Operating expenses excluding restructuring costs and intangible asset amortization as a % of AEA(1) | 2.56 | % | 2.76 | % | 2.89 | % | |||||||||
Net efficiency ratio(2) | 65.5 | % | 71.5 | % | 69.2 | % |
(1) | Operating expenses excluding restructuring costs and intangible amortization as a % of AEA is a non-GAAP measure; see “Non-GAAP Financial Measurements” for a reconciliation of non-GAAP to GAAP financial information. |
(2) | Net efficiency ratio is a non-GAAP measurement used by management to measure operating expenses (before restructuring costs and intangible amortization) to the level of total net revenues. See “Non-GAAP Financial Measurements” for a reconciliation of non-GAAP to GAAP financial information. |
target by yearend 2016, as outlined previously in the2016 Priorities and Accomplishments section.
- | Compensation and benefits increased in 2016 compared to 2015. The primary driver of the increase was the higher level of employees throughout the year, which included a full year of the additional employee costs from OneWest Bank. Through the year, we reduced total employees as a result of business sales, such as the Canadian Equipment and Corporate Finance businesses, and other strategic initiatives, which resulted in the lower headcount from December 31, 2015. The compensation and benefits increase in 2015 compared to 2014 reflected the impact of the net increase of 1,240 employees, primarily associated with the OneWest Bank acquisition. SeeNote 20 — Retirement, Postretirement and Other Benefit Plans inItem 8. Financial Statements and Supplementary Data. |
- | Professional fees included legal and other professional fees, such as tax, audit, and consulting services. The increase in 2016 reflects costs incurred for various strategic initiatives, consulting services related to strategic reviews of our businesses, and continued OneWest Bank integration costs. We also incurred third-party costs to assist in improving our capital planning and CCAR reporting capabilities. The 2015 increase was driven by acquisition items such as transaction costs related to the OneWest Transaction, initial integration related costs, and exits of our non-strategic portfolios. |
- | Technology costs increased in 2016 related to system upgrades and enhancements incurred to integrate OneWest Bank, charges to write-off certain capitalized IT costs, and the additional regulatory reporting requirements of being a SIFI organization. |
- | Insurance expenses increased in 2016 and 2015, mostly reflecting higher FDIC costs to insure the increased deposit balances for the entire year compared to a partial year in 2015. |
- | Net Occupancy expenses were up in 2016 and 2015, reflecting the added costs associated with OneWest Bank related to the branch network and office locations the entire year compared to partial year in 2015. |
- | Advertising and marketing expenses included costs associated with raising deposits. Amounts were down in 2016 as we did not actively grow our deposit base, reflecting our asset levels and continued portfolio sales. |
- | Provision for severance and facilities exiting activities reflects costs associated with various organization efficiency initiatives. Restructuring costs in 2016 primarily reflects strategic initiatives to reduce operating expenses and streamline our operations, which along with portfolio exits, resulted in employee reductions. Restructuring costs in 2015 mostly reflected severance related to streamlining the senior management structure, mainly the result of the OneWest Transaction. The 2014 charges were primarily severance costs related to the termination of approximately 150 employees. The facility exiting activities were minor in comparison. SeeNote 27 — Severance and Facility Exiting Liabilities for additional information inItem 8. Financial Statements and Supplementary Data. |
- | Amortization of intangible assets increased in 2016, primarily reflecting a full year of amortization of the intangible assets recorded in the OneWest Transition, while the increase in 2015 compared to 2014 reflected five months of the added amortization expense. SeeNote 26 — Goodwill and Intangible Assets inItem 8. Financial Statements and Supplementary Data, which displays the intangible assets by type and segment, and describes the accounting methodologies. |
- | Other expenses include items such as travel and entertainment, office equipment and supplies costs and taxes (other than income taxes, such as state sales tax, etc.), and from time to time includes settlement agreement costs, including OneWest Bank legacy matters. Other expenses increased in 2016 and 2015 reflecting OneWest Bank activity and legacy matters, such as servicing related contingent obligations, items related to the loss share agreements with the FDIC, and other indemnifications that were inherited by CIT from OneWest Bank with the acquisition. |
INCOME TAXES
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Provision for income taxes, before discrete tax items | $ | 143.5 | $ | 79.5 | $ | 19.5 | |||||||||
Discrete tax items | 60.0 | (617.5 | ) | (451.9 | ) | ||||||||||
Provision (benefit) for income taxes | $ | 203.5 | $ | (538.0 | ) | $ | (432.4 | ) | |||||||
Effective tax rate | 978.0 | % | (289.2 | )% | (176.8 | )% | |||||||||
Effective tax rate, before discrete tax items | 689.4 | % | 42.8 | % | 8.0 | % |
- | $54 million tax expense related to establishment of domestic and international deferred tax liabilities due to Management’s decision to no longer assert its intent to indefinitely reinvest its unremitted earnings in Canada, |
- | $15 million tax expense related to the establishment of valuation allowances against certain international net deferred tax assets due to our international platform rationalizations, |
- | $14 million tax benefit, including interest and penalties, recorded in the first quarter resulting from resolution of certain tax matters by the tax authorities related to uncertain tax positions taken on certain prior year non-U.S. tax returns, and |
- | $5 million of miscellaneous net tax expense items. |
- | $647 million tax benefit corresponding to a reduction to the U.S. federal DTA valuation allowance after considering the impact on earnings of the OneWest acquisition to support the Company’s ability to utilize the U.S. federal net operating losses, |
- | $29 million tax expense including interest and penalties, related to an uncertain tax position taken on certain prior year international tax returns, |
- | $28 million tax expense related to the establishment of domestic and international deferred tax liabilities due to Management’s decision to no longer assert its intent to indefinitely reinvest its unremitted earnings in China, |
- | $18 million tax benefit including interest and penalties, related to changes in uncertain tax positions from resolution of open tax matters and closure of statutes, and |
- | $9 million tax benefit corresponding to a reduction of certain tax reserves upon the receipt of a favorable tax ruling on an uncertain tax position taken on prior years’ tax returns. |
RESULTS BY BUSINESS SEGMENT
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Earnings Summary | |||||||||||||||
Interest income | $ | 1,287.9 | $ | 1,029.1 | $ | 845.8 | |||||||||
Rental income on operating leases | 1,020.0 | 981.4 | 896.0 | ||||||||||||
Finance revenue | 2,307.9 | 2,010.5 | 1,741.8 | ||||||||||||
Interest expense | (519.1 | ) | (481.4 | ) | (441.9 | ) | |||||||||
Depreciation on operating lease equipment | (261.1 | ) | (218.3 | ) | (201.0 | ) | |||||||||
Maintenance and other operating lease expenses | (213.6 | ) | (185.1 | ) | (171.7 | ) | |||||||||
Net finance revenue (NFR) | 1,314.1 | 1,125.7 | 927.2 | ||||||||||||
Provision for credit losses | (183.1 | ) | (143.7 | ) | (73.3 | ) | |||||||||
Other income | 293.8 | 302.6 | 327.7 | ||||||||||||
Operating expenses | (761.6 | ) | (727.4 | ) | (642.3 | ) | |||||||||
Goodwill impairment | (34.8 | ) | – | – | |||||||||||
Income before provision for income taxes | $ | 628.4 | $ | 557.2 | $ | 539.3 | |||||||||
Select Average Balances | |||||||||||||||
Average finance receivables (AFR) | $ | 23,128.6 | $ | 19,702.3 | $ | 15,636.4 | |||||||||
Average earning assets (AEA) | 29,762.9 | 25,339.6 | 20,833.7 | ||||||||||||
Average operating leases (AOL) | 7,188.6 | 6,283.4 | 5,673.4 | ||||||||||||
Statistical Data | |||||||||||||||
Net finance margin — NFR as a % of AEA | 4.42 | % | 4.44 | % | 4.45 | % | |||||||||
Net operating lease revenue — rental income, net of depreciation and maintenance and other operating lease expenses | $ | 545.3 | $ | 578.0 | $ | 523.3 | |||||||||
Operating lease margin as a % of AOL | 7.59 | % | 9.20 | % | 9.22 | % | |||||||||
Pretax return on AEA | 2.11 | % | 2.20 | % | 2.59 | % | |||||||||
New business volume | $ | 8,216.2 | $ | 9,005.1 | $ | 7,522.0 | |||||||||
Factoring volume | $ | 24,907.4 | $ | 25,839.4 | $ | 26,702.5 |
- | NFR increased from 2015 and 2014, and primarily benefited from higher average earning assets and purchase accounting accretion, as well as the impact of interest recoveries on loans previously charged off. Purchase accounting accretion totaled $150 million in 2016, essentially all of which benefited interest income, with a small amount decreasing interest expense, up from $65 million in 2015. (Purchase accounting accretion is presented in tabular form in theNet Finance Revenue section.) Loan prepayment activity was up in 2016 after it had slowed in 2015, and interest recoveries were also up from 2015 but below 2014. NFM was essentially flat in 2016, as improvements in three of the divisions were offset by a decline in Rail, as discussed below. |
- | Gross yields (interest income plus rental income on operating leases as a % of AEA) for the segment were down from 2015, as the decrease in Rail offset higher yields in Commercial Finance, Real Estate Finance, and Business Capital. Commercial Finance and Real Estate Finance benefited from PAA accretion and interest recoveries on loans previously charged off. Gross yields decreased in Rail, primarily reflecting lower utilization and lower lease rates on energy related cars. Gross yields in 2015 were down from 2014, mainly reflecting the impact of the acquired assets due to portfolio mix, along with continued pressures on yields, as new business yields were generally below maturing contracts. See Select Segment and Division Margin Metrics table inNet Finance Revenue section for further discussion of gross yields. |
- | Net operating lease revenue, which is a component of NFR, is driven primarily by the performance of our rail portfolio. Net operating lease revenue decreased from 2015, as increased rental income from growth in the Rail division was offset by lower lease rates, as well as higher depreciation and maintenance and operating lease expenses. Maintenance and other operating lease expenses primarily relate to the rail portfolio, and were up reflecting increased maintenance, freight and storage costs in rail, and growth in the portfolio. Net operating lease revenue also reflects trends in equipment utilization with railcar utilization declining, a trend that is expected to continue into 2017 due to continued weakness in demand for select energy related car types. The decline in the operating lease margin (as a percentage of average operating lease equipment) reflects these trends primarily driven by the energy sector. Renewal rates on railcars have been repricing down 20%-30% on average. Net operating lease revenue increased in 2015 compared to 2014, driven by growth, while operating lease margin declined due to pressure on renewal rates on certain railcars. |
- | Railcar utilization rates, including commitments to lease, declined during 2016 to 94%, from 96% at December 31, 2015, and 99% at December 31, 2014, reflecting pressures mostly from energy related industries, which impacted certain railcars such as tank, sand and coal cars. |
- | Other income was down from 2015 and 2014, reflecting the following: |
- | Factoring commissions of $105 million were down from both prior years reflecting lower factoring volume and pressure on factoring commission rates due to changes in the portfolio mix and competition. |
- | Gains on assets sold totaled $83 million in 2016, $75 million in 2015 and $105 million in 2014. About half of the 2016 gain was on rail equipment, with most of the remaining in the Commercial Finance division, driven by a sizable investment gain in the fourth quarter. Nearly half of the gains in 2015 were on rail equipment, while the remaining was nearly split between Commercial Finance and Business Capital. In 2014, gains were driven by Commercial Finance. |
- | Impairment charges on AHFS totaled $15 million, $4 million and $0.1 million in 2016, 2015 and 2014, respectively, and predominantly related to rail cars. |
- | Fee revenue was up from both 2015 and 2014, reflecting the impact of higher capital market fees in Commercial Finance and the OneWest Transaction in 2015 versus 2014. As a result of the acquisition, banking related fees expanded and includes items such as cash management fees and account fees. Fee revenue was $99 million in 2016, up from $94 million in 2015 and $78 million in 2014. |
- | The provision for credit losses was up from 2015 and 2014, and reflects additional new business volume and higher reserve rates in the Commercial Finance, Real Estate Finance and Business Capital divisions. The increase in 2015 from 2014 also reflected reserve build on the acquired receivables. Net charge-offs were $112 million (0.48% of average finance receivables) for 2016, compared to $95 million (0.48%) in 2015 and $52 million (0.33%) in 2014. Net charge-offs excluding assets held for sale were $71 million in the current year, compared to $62 million in 2015 and $34 million in 2014. The increases in 2016 reflected higher charge-offs in the energy sector. Non-accrual loans increased to $251 million (1.11% of finance receivables), from $191 million (0.82%) at December 31, 2015 and $89 million (0.53%) at December 31, 2014. The increase in 2016 was driven mostly in the maritime portfolio, plus other sectors in Commercial Finance. The increase in 2015 was driven by the inclusion of the assets acquired in the OneWest Transaction. |
- | The increases in operating expenses from 2015 and 2014 are primarily due to the inclusion of a full year of costs related to the OneWest Transaction. |
Years Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2016 | December 31, 2015 | ||||||||||
Earnings Summary | |||||||||||
Interest income | $ | 420.8 | $ | 176.1 | |||||||
Interest expense | (10.2 | ) | (24.9 | ) | |||||||
Net finance revenue (NFR) | 410.6 | 151.2 | |||||||||
Provision for credit losses | (11.7 | ) | (8.7 | ) | |||||||
Other income | 40.0 | 5.4 | |||||||||
Operating expenses | (380.9 | ) | (158.4 | ) | |||||||
Goodwill impairment | (319.4 | ) | – | ||||||||
Loss before provision for income taxes | $ | (261.4 | ) | $ | (10.5 | ) | |||||
Select Average Balances | |||||||||||
Average finance receivables (AFR) | $ | 7,105.1 | $ | 2,998.9 | |||||||
Average earning assets (AEA) | $ | 7,527.4 | $ | 3,202.4 | |||||||
Statistical Data | |||||||||||
Net finance margin — NFR as a % of AEA | 5.45 | % | 4.72 | % | |||||||
Pretax return on AEA | (3.47 | )% | (0.33 | )% | |||||||
Other Select Balances | |||||||||||
New business volume | $ | 960.5 | $ | 249.9 | |||||||
Deposits | $ | 22,542.2 | $ | 22,872.8 |
- | NFR benefited from purchase accounting accretion of $138 million in 2016, of which $129 million increased interest income and the remaining decreased interest expense. In 2015, accretion benefited NFR by $53 million, $47 million of which increased interest income. Gross yield for the portfolio was 5.59% for 2016 and 5.50% for the period of ownership in 2015. |
- | Other income included gains on OREO properties, fee revenue, and other miscellaneous income, including pre-acquisition recoveries. Other income in 2016 included gains on OREO properties of $11 million in 2016, fee revenue of $10 million and other miscellaneous income. Other income in 2015 included fee revenue of $5 million and other revenue, partially offset by losses on OREO properties of $5 million. |
- | Non-accrual loans were $17 million (0.25% of finance receivables) at December 31, 2016, up from $5 million (0.07%) at December 31, 2015. Non-accrual loans were in the LCM portfolio. Net charge off is insignificant in 2016 despite the increase in non-accrual loans. |
- | Operating expenses were reflective of the full year inclusion of OneWest Bank activity compared to five months in 2015, Operating expenses reflect the inclusion of branch operation expenses, OREO costs and FDIC insurance, which also causes the net efficiency ratio to be higher than other segments. Operating expenses in 2016 were also elevated due to certain larger items, including $27 million from the resolution of legacy items assumed with the OneWest Transaction (servicing-related contingent reserves and resolution of a pre-acquisition litigation matter) described inNote 22 —Contingencies inItem 8. Financial Statements and Supplementary Data. In addition, operating expenses included approximately $3 million write-off of servicing advances deemed non-recoverable. |
- | See Note 26 — Goodwill and Intangible Assets in Item 8. Financial Statements and Supplementary Data for discussion of goodwill impairment. |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Earnings Summary | |||||||||||||||
Interest income | $ | 80.8 | $ | 184.8 | $ | 295.6 | |||||||||
Rental income on operating leases | 11.6 | 36.7 | 53.6 | ||||||||||||
Finance revenue | 92.4 | 221.5 | 349.2 | ||||||||||||
Interest expense | (47.2 | ) | (121.4 | ) | (218.4 | ) | |||||||||
Depreciation on operating lease equipment | – | (10.9 | ) | (28.8 | ) | ||||||||||
Net finance revenue (NFR) | 45.2 | 89.2 | 102.0 | ||||||||||||
Provision for credit losses | 0.1 | (6.2 | ) | (30.9 | ) | ||||||||||
Other income | 52.1 | (96.8 | ) | (27.5 | ) | ||||||||||
Operating expenses | (42.2 | ) | (123.9 | ) | (180.9 | ) | |||||||||
Income (loss) before provision for income taxes | $ | 55.2 | $ | (137.7 | ) | $ | (137.3 | ) | |||||||
Select Average Balances | |||||||||||||||
Average finance receivables (AFR) | $ | – | $ | 982.0 | $ | 2,449.0 | |||||||||
Average earning assets (AEA) | 1,175.6 | 2,375.7 | 3,955.4 | ||||||||||||
Statistical Data | |||||||||||||||
Net finance margin — NFR as a % of AEA | 3.84 | % | 3.75 | % | 2.58 | % | |||||||||
New business volume | $ | 151.1 | $ | 768.2 | $ | 1,302.9 |
- | Net finance revenue (“NFR”) was down, driven by lower earning assets due to the sales previously noted. |
- | Other income increased from the prior years, reflecting: |
- | Gains of $22 million on sales in 2016 related to the Canadian Equipment and Corporate Finance businesses ($0.7 billion of financing and leasing assets). Losses on asset sales in 2015 of $59 million (of which $70 million related to CTA losses) on $400 million of receivable and equipment sales, reflecting sales of the Mexico, Brazil and certain U.K. equipment portfolios. Gains of $22 million on $1.2 billion of receivable and equipment sales in 2014 were driven by gains on the sale of the U.K. corporate lending portfolio of $11 million. |
- | Impairment charges recorded on international equipment finance portfolios and operating lease equipment held for sale. Impairment charges were $22 million for 2016, compared to $52 million and $81 million for 2015 and 2014, respectively. See“Non-interest Income” and“Expenses” for discussions on impairment charges and suspended depreciation on operating lease equipment held for sale. |
- | The remaining balance includes fee revenue, recoveries of amounts previously charged off, fees related to transition service agreements and other revenues. Fee revenue in 2014 included servicing fees related to the SBL portfolio, which totaled $5 million. |
- | Non-accrual loans decreased to $10 million at December 31, 2016, from $56 million at December 31, 2015, and $72 million at December 31, 2014, reflecting the previously mentioned sales. The provision for credit losses was down from 2015 and 2014, and reflects the classification of assets as held for sale, which do not require a provision for credit losses, but the assets are reviewed for impairment. There was an insignificant recovery in 2016, compared to net charge-offs of $41 million in 2015 and $47 million in 2014. Net charge-offs resulting from assets transferred to held for sale were $40 million in 2015 and $24 million in 2014. |
- | Operating expenses were down, primarily reflecting lower cost due to sales of businesses and run-off of assets. |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Earnings Summary | |||||||||||||||
Interest income | $ | 122.0 | $ | 55.2 | $ | 14.2 | |||||||||
Finance revenue | 122.0 | 55.2 | 14.2 | ||||||||||||
Interest expense | (176.7 | ) | (103.7 | ) | (54.8 | ) | |||||||||
Net finance revenue (NFR) | (54.7 | ) | (48.5 | ) | (40.6 | ) | |||||||||
Provision for credit losses | – | – | (0.2 | ) | |||||||||||
Other income | (235.3 | ) | (61.6 | ) | (36.3 | ) | |||||||||
Operating expenses / loss on debt extinguishment and deposit redemption | (111.3 | ) | (112.9 | ) | (80.4 | ) | |||||||||
Loss before provision for income taxes | $ | (401.3 | ) | $ | (223.0 | ) | $ | (157.5 | ) |
- | Interest income consists of interest and dividend income, primarily from investment securities and deposits held at other depository institutions. The increases in 2016 and 2015 reflect additional income from the investment portfolio as we redeployed cash at CIT Bank into higher-yielding “High Quality Liquid Assets.” The 2015 increase reflected the OneWest Transaction that included a MBS portfolio. |
- | Interest expense in Corporate represents amounts in excess of expenses allocated to segments and amounts related to excess liquidity. |
- | Driving the significant 2016 negative amount was a fourth quarter termination charge of approximately $280 million related to the Canadian TRS, partially offset by a positive mark-to-market gain for the year of $44 million on the TRS primarily due to the Canadian TRS termination. The TRS Transactions had a negative mark-to-market of $30 million in 2015 and $15 million in 2014. We continue to utilize the Dutch TRS, which at December 31, 2016, was over 80% utilized. |
- | Other income also included gains of $11 million and losses of $7 million for 2016 and 2015, respectively, related to the MBS securities portfolio, which is carried at fair value. |
- | The 2015 balance also included $9 million related to the write-off of other receivables that was fully offset with a benefit to the tax provision. |
- | Operating expenses reflects salary and general and administrative expenses in excess of amounts allocated to the business segments and litigation-related costs. Operating expenses were up from 2015 and 2014, due to higher professional fees along with additional costs of being a larger bank, due to the OneWest Bank acquisition. Operating expenses also included $36 million, $58 million and $31 million related to provision for severance and facilities exiting activities during 2016, 2015 and 2014, respectively. |
FINANCING AND LEASING ASSETS
December 31, | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | $ Change 2016 vs 2015 | $ Change 2015 vs 2014 | |||||||||||||||||||
Commercial Banking | |||||||||||||||||||||||
Loans | $ | 22,562.3 | $ | 23,332.4 | $ | 16,727.8 | $ | (770.1 | ) | $ | 6,604.6 | ||||||||||||
Operating lease equipment, net | 7,486.1 | 6,851.7 | 5,937.1 | 634.4 | 914.6 | ||||||||||||||||||
Assets held for sale | 357.7 | 435.1 | 43.7 | (77.4 | ) | 391.4 | |||||||||||||||||
Financing and leasing assets | 30,406.1 | 30,619.2 | 22,708.6 | (213.1 | ) | 7,910.6 | |||||||||||||||||
Commercial Finance | |||||||||||||||||||||||
Loans | 9,923.9 | 11,389.9 | 8,184.4 | (1,466.0 | ) | 3,205.5 | |||||||||||||||||
Assets held for sale | 351.4 | 333.1 | 42.5 | 18.3 | 290.6 | ||||||||||||||||||
Financing and leasing assets | 10,275.3 | 11,723.0 | 8,226.9 | (1,447.7 | ) | 3,496.1 | |||||||||||||||||
Real Estate Finance | |||||||||||||||||||||||
Loans | 5,566.6 | 5,311.5 | 1,768.5 | 255.1 | 3,543.0 | ||||||||||||||||||
Assets held for sale | – | 57.0 | – | (57.0 | ) | 57.0 | |||||||||||||||||
Financing and leasing assets | 5,566.6 | 5,368.5 | 1,768.5 | 198.1 | 3,600.0 | ||||||||||||||||||
Business Capital | |||||||||||||||||||||||
Loans | 6,968.1 | 6,510.0 | 6,644.9 | 458.1 | (134.9 | ) | |||||||||||||||||
Operating lease equipment, net | 369.0 | 259.0 | 221.8 | 110.0 | 37.2 | ||||||||||||||||||
Assets held for sale | 6.0 | 44.3 | – | (38.3 | ) | 44.3 | |||||||||||||||||
Financing and leasing assets | 7,343.1 | 6,813.3 | 6,866.7 | 529.8 | (53.4 | ) | |||||||||||||||||
Rail | |||||||||||||||||||||||
Loans | 103.7 | 121.0 | 130.0 | (17.3 | ) | (9.0 | ) | ||||||||||||||||
Operating lease equipment, net | 7,117.1 | 6,592.7 | 5,715.3 | 524.4 | 877.4 | ||||||||||||||||||
Assets held for sale | 0.3 | 0.7 | 1.2 | (0.4 | ) | (0.5 | ) | ||||||||||||||||
Financing and leasing assets | 7,221.1 | 6,714.4 | 5,846.5 | 506.7 | 867.9 | ||||||||||||||||||
Consumer Banking | |||||||||||||||||||||||
Loans | 6,973.6 | 7,186.3 | – | (212.7 | ) | 7,186.3 | |||||||||||||||||
Assets held for sale | 68.2 | 45.1 | – | 23.1 | 45.1 | ||||||||||||||||||
Financing and leasing assets | 7,041.8 | 7,231.4 | – | (189.6 | ) | 7,231.4 | |||||||||||||||||
Legacy Consumer Mortgages | |||||||||||||||||||||||
Loans | 4,829.9 | 5,427.2 | – | (597.3 | ) | 5,427.2 | |||||||||||||||||
Assets held for sale | 32.8 | 41.2 | – | (8.4 | ) | 41.2 | |||||||||||||||||
Financing and leasing assets | 4,862.7 | 5,468.4 | – | (605.7 | ) | 5,468.4 | |||||||||||||||||
Other Consumer Banking | |||||||||||||||||||||||
Loans | 2,143.7 | 1,759.1 | – | 384.6 | 1,759.1 | ||||||||||||||||||
Assets held for sale | 35.4 | 3.9 | – | 31.5 | 3.9 | ||||||||||||||||||
Financing and leasing assets | 2,179.1 | 1,763.0 | – | 416.1 | 1,763.0 | ||||||||||||||||||
Non-Strategic Portfolios | |||||||||||||||||||||||
Loans | – | – | 1,532.8 | – | (1,532.8 | ) | |||||||||||||||||
Operating lease equipment, net | – | – | 43.8 | – | (43.8 | ) | |||||||||||||||||
Assets held for sale | 210.1 | 1,577.5 | 782.8 | (1,367.4 | ) | 794.7 | |||||||||||||||||
Financing and leasing assets | 210.1 | 1,577.5 | 2,359.4 | (1,367.4 | ) | (781.9 | ) | ||||||||||||||||
Total Loans | 29,535.9 | 30,518.7 | 18,260.6 | (982.8 | ) | 12,258.1 | |||||||||||||||||
Total operating lease equipment, net | 7,486.1 | 6,851.7 | 5,980.9 | 634.4 | 870.8 | ||||||||||||||||||
Total assets held for sale | 636.0 | 2,057.7 | 826.5 | (1,421.7 | ) | 1,231.2 | |||||||||||||||||
Total financing and leasing assets | $ | 37,658.0 | $ | 39,428.1 | $ | 25,068.0 | $ | (1,770.1 | ) | $ | 14,360.1 |
Commercial | Consumer | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
U.S. | Foreign | U.S. | Total | ||||||||||||||||
Fixed-rate | |||||||||||||||||||
1 year or less | $ | 4,188.1 | $ | 126.3 | $ | 58.5 | $ | 4,372.9 | |||||||||||
Year 2 | 1,963.0 | 13.0 | 62.0 | 2,038.0 | |||||||||||||||
Year 3 | 1,604.1 | 61.1 | 54.5 | 1,719.7 | |||||||||||||||
Year 4 | 644.6 | 11.2 | 56.3 | 712.1 | |||||||||||||||
Year 5 | 351.1 | 30.6 | 58.4 | 440.1 | |||||||||||||||
2-5 years | 4,562.8 | 115.9 | 231.2 | 4,909.9 | |||||||||||||||
After 5 years | 405.4 | 92.8 | 2,437.6 | 2,935.8 | |||||||||||||||
Total fixed-rate | 9,156.3 | 335.0 | 2,727.3 | 12,218.6 | |||||||||||||||
Adjustable-rate | |||||||||||||||||||
1 year or less | 1,844.3 | 190.4 | 87.9 | 2,122.6 | |||||||||||||||
Year 2 | 1,895.9 | 368.9 | 97.6 | 2,362.4 | |||||||||||||||
Year 3 | 1,888.4 | 422.8 | 104.5 | 2,415.7 | |||||||||||||||
Year 4 | 1,872.0 | 219.0 | 108.7 | 2,199.7 | |||||||||||||||
Year 5 | 2,464.4 | 305.7 | 113.3 | 2,883.4 | |||||||||||||||
2-5 years | 8,120.7 | 1,316.4 | 424.1 | 9,861.2 | |||||||||||||||
After 5 years | 1,815.9 | 209.5 | 4,730.7 | 6,756.1 | |||||||||||||||
Total adjustable-rate | 11,780.9 | 1,716.3 | 5,242.7 | 18,739.9 | |||||||||||||||
Total | $ | 20,937.2 | $ | 2,051.3 | $ | 7,970.0 | $ | 30,958.5 |
Commercial Banking | Consumer Banking | Non- Strategic Portfolios | Total | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance at December 31, 2013 | $ | 19,315.3 | $ | – | $ | 4,050.4 | $ | 23,365.7 | ||||||||||
New business volume | 7,522.0 | – | 1,302.9 | 8,824.9 | ||||||||||||||
Portfolio / business purchases | 1,185.8 | – | – | 1,185.8 | ||||||||||||||
Loan and portfolio sales | (433.6 | ) | – | (955.3 | ) | (1,388.9 | ) | |||||||||||
Equipment sales | (242.9 | ) | – | (200.5 | ) | (443.4 | ) | |||||||||||
Depreciation | (201.0 | ) | – | (28.8 | ) | (229.8 | ) | |||||||||||
Gross charge-offs | (69.3 | ) | – | (57.5 | ) | (126.8 | ) | |||||||||||
Collections and other | (4,367.7 | ) | – | (1,751.8 | ) | (6,119.5 | ) | |||||||||||
Balance at December 31, 2014 | 22,708.6 | – | 2,359.4 | 25,068.0 | ||||||||||||||
New business volume | 9,005.1 | 249.9 | 768.2 | 10,023.2 | ||||||||||||||
Portfolio / business purchases | 6,308.5 | 7,372.3 | – | 13,680.8 | ||||||||||||||
Loan and portfolio sales | (844.7 | ) | (17.1 | ) | (274.8 | ) | (1,136.6 | ) | ||||||||||
Equipment sales | (217.2 | ) | – | (125.1 | ) | (342.3 | ) | |||||||||||
Depreciation | (218.3 | ) | – | (10.9 | ) | (229.2 | ) | |||||||||||
Gross charge-offs | (113.0 | ) | (1.3 | ) | (50.8 | ) | (165.1 | ) | ||||||||||
Collections and other | (6,009.8 | ) | (372.4 | ) | (1,088.5 | ) | (7,470.7 | ) | ||||||||||
Balance at December 31, 2015 | 30,619.2 | 7,231.4 | 1,577.5 | 39,428.1 | ||||||||||||||
New business volume | 8,216.2 | 960.5 | 151.1 | 9,327.8 | ||||||||||||||
Portfolio / business purchases | 64.1 | – | – | 64.1 | ||||||||||||||
Loan and portfolio sales | (484.2 | ) | (87.7 | ) | (717.3 | ) | (1,289.2 | ) | ||||||||||
Equipment sales | (258.5 | ) | – | (85.6 | ) | (344.1 | ) | |||||||||||
Depreciation | (261.1 | ) | – | – | (261.1 | ) | ||||||||||||
Gross charge-offs | (133.8 | ) | (2.8 | ) | – | (136.6 | ) | |||||||||||
Collections and other | (7,355.8 | ) | (1,059.6 | ) | (715.6 | ) | (9,131.0 | ) | ||||||||||
Balance at December 31, 2016 | $ | 30,406.1 | $ | 7,041.8 | $ | 210.1 | $ | 37,658.0 |
CONCENTRATIONS
December 31, 2016 | December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
West | $ | 11,858.7 | 31.5 | % | $ | 11,972.1 | 30.4 | % | $ | 3,027.4 | 12.1 | % | |||||||||||||||
Northeast | 9,766.0 | 25.9 | % | 9,436.1 | 23.9 | % | 6,536.0 | 26.1 | % | ||||||||||||||||||
Midwest | 4,241.9 | 11.3 | % | 4,269.9 | 10.8 | % | 3,635.6 | 14.5 | % | ||||||||||||||||||
Southwest | 4,112.8 | 10.9 | % | 4,166.8 | 10.6 | % | 3,253.4 | 13.0 | % | ||||||||||||||||||
Southeast | 3,299.5 | 8.8 | % | 3,728.9 | 9.5 | % | 2,875.7 | 11.5 | % | ||||||||||||||||||
Total U.S. | 33,278.9 | 88.4 | % | 33,573.8 | 85.2 | % | 19,328.1 | 77.2 | % | ||||||||||||||||||
Canada | 1,199.8 | 3.2 | % | 1,964.9 | 5.0 | % | 2,032.2 | 8.1 | % | ||||||||||||||||||
Europe | 1,154.5 | 3.1 | % | 1,363.6 | 3.4 | % | 1,409.7 | 5.6 | % | ||||||||||||||||||
Asia / Pacific | 1,100.1 | 2.9 | % | 1,656.7 | 4.2 | % | 1,386.3 | 5.5 | % | ||||||||||||||||||
All other countries | 924.7 | 2.4 | % | 869.1 | 2.2 | % | 911.7 | 3.6 | % | ||||||||||||||||||
Total | $ | 37,658.0 | 100.0 | % | $ | 39,428.1 | 100.0 | % | $ | 25,068.0 | 100.0 | % |
December 31, 2016 | December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Northeast | $ | 8,643.0 | 27.9 | % | $ | 8,136.1 | 25.0 | % | $ | 6,536.0 | 26.1 | % | |||||||||||||||
West | 7,168.7 | 23.1 | % | 7,270.9 | 22.4 | % | 3,027.4 | 12.1 | % | ||||||||||||||||||
Midwest | 4,027.8 | 13.0 | % | 4,024.3 | 12.4 | % | 3,635.6 | 14.5 | % | ||||||||||||||||||
Southwest | 4,016.7 | 12.9 | % | 4,100.6 | 12.6 | % | 3,253.4 | 13.0 | % | ||||||||||||||||||
Southeast | 2,789.3 | 9.0 | % | 3,136.6 | 9.6 | % | 2,875.7 | 11.5 | % | ||||||||||||||||||
Total U.S. | 26,645.5 | 85.9 | % | 26,668.5 | 82.0 | % | 19,328.1 | 77.2 | % | ||||||||||||||||||
Asia / Pacific | 1,100.1 | 3.5 | % | 1,656.7 | 5.1 | % | 1,386.3 | 5.5 | % | ||||||||||||||||||
Europe | 1,154.5 | 3.7 | % | 1,363.6 | 4.2 | % | 1,409.7 | 5.6 | % | ||||||||||||||||||
Canada | 1,199.8 | 3.9 | % | 1,964.9 | 6.0 | % | 2,032.2 | 8.1 | % | ||||||||||||||||||
All other countries | 924.7 | 3.0 | % | 869.1 | 2.7 | % | 911.7 | 3.6 | % | ||||||||||||||||||
Total | $ | 31,024.6 | 100.0 | % | $ | 32,522.8 | 100.0 | % | $ | 25,068.0 | 100.0 | % |
December 31, 2016 | December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
State | |||||||||||||||||||||||||||
California | $ | 5,220.8 | 16.8 | % | $ | 5,301.0 | 16.3 | % | $ | 1,488.0 | 5.9 | % | |||||||||||||||
Texas | 3,296.3 | 10.6 | % | 3,444.6 | 10.6 | % | 2,687.3 | 10.7 | % | ||||||||||||||||||
New York | 3,084.0 | 10.0 | % | 2,841.8 | 8.7 | % | 2,492.9 | 10.0 | % | ||||||||||||||||||
Delaware | 1,573.8 | 5.1 | % | 1,230.6 | 3.8 | % | 504.8 | 2.0 | % | ||||||||||||||||||
All other states | 13,470.6 | 43.4 | % | 13,850.5 | 42.6 | % | 12,155.1 | 48.5 | % | ||||||||||||||||||
Total U.S. | $ | 26,645.5 | 85.9 | % | $ | 26,668.5 | 82.0 | % | $ | 19,328.1 | 77.2 | % | |||||||||||||||
Country | |||||||||||||||||||||||||||
Canada | $ | 1,199.8 | 3.9 | % | $ | 1,964.9 | 6.0 | % | $ | 2,032.2 | 8.1 | % | |||||||||||||||
Marshall Islands | 632.2 | 2.0 | % | 882.0 | 2.7 | % | 682.2 | 2.7 | % | ||||||||||||||||||
All other countries | 2,547.1 | 8.2 | % | 3,007.4 | 9.3 | % | 3,025.5 | 12.0 | % | ||||||||||||||||||
Total International | $ | 4,379.1 | 14.1 | % | $ | 5,854.3 | 18.0 | % | $ | 5,739.9 | 22.8 | % |
2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Country | Banks (**) | Government | Other | Net Local Country Claims | Total Exposure | Exposure as a Percentage of Total Assets | Total Exposure | Exposure as a Percentage of Total Assets | Total Exposure | Exposure as a Percentage of Total Assets | |||||||||||||||||||||||||||||||||
Canada | $ | – | $ | – | $ | – | $ | – | $ | – | (*) | $ | 970.0 | 1.44 | % | $ | 1,397.0 | 2.93 | % | ||||||||||||||||||||||||
United Kingdom | – | – | – | – | – | (*) | 904.0 | 1.34 | % | 1,129.0 | 2.36 | % | |||||||||||||||||||||||||||||||
Marshall Islands | – | – | 667.0 | – | 667.0 | 1.04 | % | 812.0 | 1.20 | % | �� | 687.0 | 1.44 | % | |||||||||||||||||||||||||||||
China | – | – | – | – | – | (*) | 678.0 | 1.01 | % | 853.0 | 1.79 | % | |||||||||||||||||||||||||||||||
France | 456.0 | – | 580.0 | 31.0 | 1,067.0 | 1.66 | % | – | (*) | 426.0 | 0.89 | % |
(*) | Cross-border outstandings were less than 0.75% of total consolidated assets |
(**) | Claims from Bank counterparties include claims outstanding from derivative products. |
December 31, 2016 | December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Real Estate | $ | 4,988.5 | 16.1 | % | $ | 4,895.4 | 15.0 | % | $ | 1,590.5 | 6.3 | % | |||||||||||||||
Manufacturing(1) | 4,478.7 | 14.4 | % | 4,889.1 | 15.0 | % | 4,603.5 | 18.4 | % | ||||||||||||||||||
Retail(2) | 2,296.3 | 7.4 | % | 2,470.7 | 7.6 | % | 3,175.9 | 12.7 | % | ||||||||||||||||||
Energy and utilities | 2,224.4 | 7.2 | % | 2,084.1 | 6.4 | % | 1,505.0 | 6.0 | % | ||||||||||||||||||
Wholesale | 2,178.2 | 7.0 | % | 2,181.5 | 6.7 | % | 1,541.8 | 6.1 | % | ||||||||||||||||||
Rail | 2,088.5 | 6.7 | % | 1,742.2 | 5.4 | % | 1,385.8 | 5.5 | % | ||||||||||||||||||
Maritime | 1,660.2 | 5.4 | % | 1,832.5 | 5.6 | % | 618.0 | 2.5 | % | ||||||||||||||||||
Service industries | 1,533.7 | 4.9 | % | 1,609.0 | 5.0 | % | 1,266.6 | 5.0 | % | ||||||||||||||||||
Oil and gas extraction / services | 1,516.7 | 4.9 | % | 1,825.9 | 5.6 | % | 1,426.0 | 5.7 | % | ||||||||||||||||||
Business Services | 1,424.0 | 4.6 | % | 1,794.0 | 5.5 | % | 1,399.1 | 5.6 | % | ||||||||||||||||||
Healthcare | 1,325.3 | 4.3 | % | 1,219.2 | 3.8 | % | 1,154.2 | 4.6 | % | ||||||||||||||||||
Transportation | 809.5 | 2.6 | % | 982.6 | 3.0 | % | 1,324.5 | 5.3 | % | ||||||||||||||||||
Finance and insurance | 698.6 | 2.3 | % | 926.6 | 2.9 | % | 551.5 | 2.2 | % | ||||||||||||||||||
Other (no industry greater than 2%) | 3,802.0 | 12.2 | % | 4,070.0 | 12.5 | % | 3,525.6 | 14.1 | % | ||||||||||||||||||
Total | $ | 31,024.6 | 100.0 | % | $ | 32,522.8 | 100.0 | % | $ | 25,068.0 | 100.0 | % |
(1) | At December 31, 2016, manufacturers of chemicals, including pharmaceuticals (3.7%), petroleum and coal, including refining (2.3%), food (1.5%) and stone, clay, glass and concrete (1.3%). |
(2) | At December 31, 2016 includes retailers of general merchandise (2.6%), food and beverage (1.4%) and miscellaneous (1.3%). |
Railcar Type | Owned Fleet | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Covered Hoppers | 49,247 | |||||||||||||
Tank Cars | 37,285 | |||||||||||||
Mill/Coil Gondolas | 13,746 | |||||||||||||
Coal | 10,911 | |||||||||||||
Boxcars | 8,661 | |||||||||||||
Flatcars | 5,183 | |||||||||||||
Locomotives | 383 | |||||||||||||
Other | 6,047 | |||||||||||||
Total | 131,463 |
December 31, 2016 | December 31, 2015 | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Net Investment | % of Total | Net Investment | % of Total | ||||||||||||||||
Single family residential | $ | 5,501.6 | 82.9 | % | $ | 5,654.4 | 81.9 | % | |||||||||||
Reverse mortgage | 891.8 | 13.5 | % | 917.4 | 13.3 | % | |||||||||||||
Home Equity Lines of Credit | 237.1 | 3.6 | % | 325.7 | 4.7 | % | |||||||||||||
Other consumer | 2.9 | – | 7.8 | 0.1 | % | ||||||||||||||
Total loans | $ | 6,633.4 | 100.0 | % | $ | 6,905.3 | 100.0 | % |
December 31, 2016 | December 31, 2015 | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Net Investment | % of Total | Net Investment | % of Total | ||||||||||||||||
California | $ | 4,217.0 | 63.6 | % | $ | 4,264.7 | 61.8 | % | |||||||||||
New York | 524.0 | 7.9 | % | 565.9 | 8.2 | % | |||||||||||||
Florida | 282.7 | 4.3 | % | 318.9 | 4.6 | % | |||||||||||||
New Jersey | 159.4 | 2.4 | % | 171.4 | 2.5 | % | |||||||||||||
Maryland | 137.7 | 2.1 | % | 149.0 | 2.2 | % | |||||||||||||
Other States and Territories(1) | 1,312.6 | 19.7 | % | 1,435.4 | 20.7 | % | |||||||||||||
$ | 6,633.4 | 100.0 | % | $ | 6,905.3 | 100.0 | % |
(1) | No state or territories have total carrying value in excess of 2%. |
FUNDING AND LIQUIDITY
December 31, 2016 | December 31, 2015 | December 31, 2014 | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Available-for-sale securities | |||||||||||||||
Debt securities | $ | 3,674.1 | $ | 2,007.8 | $ | 1,116.5 | |||||||||
Equity securities | 34.1 | 14.3 | 14.0 | ||||||||||||
Held-to-maturity securities | |||||||||||||||
Debt securities | 243.0 | 300.1 | 352.3 | ||||||||||||
Securities carried at fair value with changes recorded in net income | |||||||||||||||
Debt securities | 283.5 | 339.7 | – | ||||||||||||
Non-marketable investments | 256.4 | 291.8 | 67.5 | ||||||||||||
Total investment securities | $ | 4,491.1 | $ | 2,953.7 | $ | 1,550.3 |
- | A multi-year committed revolving credit facility that has a total commitment of $1.5 billion, of which $1.4 billion was unused. The facility was amended in February 2017 to, among other things, extend the maturity date of the facility, reduce total commitments thereunder to $1.4 billion and to further reduce total commitments thereunder to $750 million upon consummation of the sale of our Commercial Air business (see Note 31 — Subsequent Events inItem 8. Financial Statements and Supplementary Data); and |
- | Committed securitization facilities and secured bank lines totaled $3.1 billion, of which $1.9 billion was unused, provided that eligible assets are available that can be funded through these facilities. |
December 31, 2016 | December 31, 2015 | December 31, 2014 | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Deposits | 68 | % | 67 | % | 50 | % | |||||||||
Unsecured | 23 | % | 22 | % | 37 | % | |||||||||
Secured Borrowings: | |||||||||||||||
Structured financings | 4 | % | 5 | % | 12 | % | |||||||||
FHLB Advances | 5 | % | 6 | % | 1 | % |
2016 | 2015 | 2014 | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total | Percent of Total | Total | Percent of Total | Total | Percent of Total | ||||||||||||||||||||||
Checking and Savings: | |||||||||||||||||||||||||||
Non-interest bearing checking | $ | 1,255.6 | 3.9 | % | $ | 862.9 | 2.6 | % | $ | – | – | ||||||||||||||||
Interest bearing checking | 3,251.8 | 10.1 | % | 3,123.7 | 9.5 | % | – | – | |||||||||||||||||||
Money market | 6,593.3 | 20.4 | % | 5,560.5 | 17.0 | % | 1,873.8 | 11.8 | % | ||||||||||||||||||
Savings | 4,303.0 | 13.3 | % | 4,840.5 | 14.8 | % | 3,941.6 | 24.9 | % | ||||||||||||||||||
Certificates of Deposits | 16,729.0 | 51.8 | % | 18,201.8 | 55.6 | % | 9,942.2 | 62.8 | % | ||||||||||||||||||
Other | 171.6 | 0.5 | % | 172.0 | 0.5 | % | 81.1 | 0.5 | % | ||||||||||||||||||
Total | $ | 32,304.3 | 100.0 | % | $ | 32,761.4 | 100.0 | % | $ | 15,838.7 | 100.0 | % |
2014, a subsidiary of CIT Bank was a member of FHLB Des Moines and had $130 million of advances outstanding and $142 million of collateral pledged.
- | Established a $1 billion, three-year asset-based lending (“ABL”) facility in support of our factoring business in the Business Capital division, and |
- | Amended our $1.5 billion Canadian TRS facility as noted in theTRS Transactions section below. |
S&P | Fitch | Moody’s | DBRS | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
CIT Group Inc. | |||||||||||||||||||
Issuer / Counterparty Credit Rating | BB+ | BB+ | Ba3 | BB (High) | |||||||||||||||
Revolving Credit Facility Rating | BB+ | BB+ | Ba3 | BBB (Low) | |||||||||||||||
Series C Notes / Senior Unsecured Debt Rating | BB+ | BB+ | Ba3 | BB (High) | |||||||||||||||
Outlook | Stable | Stable | Review – Positive | Stable | |||||||||||||||
CIT Bank, N.A. | |||||||||||||||||||
Deposit Rating (LT/ST) | NR | BBB-/F3 | Baa3/Prime 3 | BB (High)/R-4 | |||||||||||||||
Long-term Senior Unsecured Debt Rating | BBB- | BB+ | Ba3 | BB (High) | |||||||||||||||
Outlook | Stable | Stable | Review – Positive | Positive |
Total | 2017 | 2018 | 2019 | 2020 | 2021+ | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Structured financings(2) | $ | 1,938.4 | $ | 328.1 | $ | 281.4 | $ | 787.2 | $ | 68.8 | $ | 472.9 | ||||||||||||||
FHLB advances | 2,410.6 | 15.0 | 1,150.0 | 1,245.6 | – | – | ||||||||||||||||||||
Senior unsecured | 10,645.9 | 1,978.6 | 3,115.9 | 2,750.0 | 750.0 | 2,051.4 | ||||||||||||||||||||
Total Long-term borrowings | 14,994.9 | 2,321.7 | 4,547.3 | 4,782.8 | 818.8 | 2,524.3 | ||||||||||||||||||||
Deposits | 32,294.8 | 24,225.4 | 2,673.2 | 2,072.3 | 1,555.8 | 1,768.1 | ||||||||||||||||||||
Credit balances of factoring clients | 1,292.0 | 1,292.0 | – | – | – | – | ||||||||||||||||||||
Lease rental expense | 283.8 | 49.3 | 46.6 | 44.8 | 38.7 | 104.4 | ||||||||||||||||||||
Total contractual payments | $ | 48,865.5 | $ | 27,888.4 | $ | 7,267.1 | $ | 6,899.9 | $ | 2,413.3 | $ | 4,396.8 |
(1) | Projected payments of debt interest expense and obligations relating to postretirement programs are excluded. |
(2) | Includes non-recourse secured borrowings, which are generally repaid in conjunction with the pledged receivable maturities. |
Total | 2017 | 2018 | 2019 | 2020 | 2021+ | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Financing commitments | $ | 6,008.1 | $ | 1,003.6 | 902.2 | 1,490.9 | 1,213.4 | 1,398.0 | ||||||||||||||||||
Aerospace purchase commitments(1) | 8,683.5 | 607.9 | 2,009.2 | 3,274.5 | 2,791.9 | – | ||||||||||||||||||||
Rail and other purchase commitments | 300.7 | 272.9 | 27.8 | – | – | – | ||||||||||||||||||||
Letters of credit | 246.2 | 51.2 | 36.3 | 53.4 | 32.2 | 73.1 | ||||||||||||||||||||
Deferred purchase agreements | 2,060.5 | 2,060.5 | – | – | – | – | ||||||||||||||||||||
Guarantees, acceptances and other recourse obligations | 1.6 | 1.6 | – | – | – | – | ||||||||||||||||||||
Liabilities for unrecognized tax obligations(2) | 36.4 | 5.0 | 31.4 | – | – | – | ||||||||||||||||||||
Total contractual commitments | $ | 17,337.0 | $ | 4,002.7 | $ | 3,006.9 | $ | 4,818.8 | $ | 4,037.5 | $ | 1,471.1 |
(1) | Aerospace purchase commitments are associated with Aerospace discontinued operations. These commitments are net of amounts on deposit with manufacturers. |
(2) | The balance cannot be estimated past 2018; therefore the remaining balance is reflected in 2018. |
CAPITAL
Declaration Date | Payment Date | Per Share Dividend | ||||||
---|---|---|---|---|---|---|---|---|
January | February 26, 2016 | $ | 0.15 | |||||
April | May 27, 2016 | $ | 0.15 | |||||
July | August 26, 2016 | $ | 0.15 | |||||
October | November 25, 2016 | $ | 0.15 |
December 31, 2016 | December 31, 2015 | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Tier 1 Capital | Transition Basis | Fully Phased-in Basis | Transition Basis | Fully Phased-in Basis | |||||||||||||||
Total common stockholders’ equity | $ | 10,002.7 | $ | 10,002.7 | $ | 10,944.7 | $ | 10,944.7 | |||||||||||
Effect of certain items in accumulated other comprehensive loss excluded from Tier 1 Capital and qualifying noncontrolling interests | 79.1 | 79.1 | 76.9 | 76.9 | |||||||||||||||
Adjusted total equity | 10,081.8 | 10,081.8 | 11,021.6 | 11,021.6 | |||||||||||||||
Less: Goodwill(1)(2) | (733.1 | ) | (733.1 | ) | (1,130.8 | ) | (1,130.8 | ) | |||||||||||
Disallowed deferred tax assets | (213.7 | ) | (213.7 | ) | (908.3 | ) | (908.3 | ) | |||||||||||
Disallowed intangible assets(1)(2) | (68.3 | ) | (113.8 | ) | (53.6 | ) | (134.0 | ) | |||||||||||
Other Tier 1 components | (7.8 | ) | (17.5 | ) | (0.1 | ) | (0.1 | ) | |||||||||||
CET 1 Capital | 9,058.9 | 9,003.7 | 8,928.8 | 8,848.4 | |||||||||||||||
Tier 1 Capital | 9,058.9 | 9,003.7 | 8,928.8 | 8,848.4 | |||||||||||||||
Tier 2 Capital | |||||||||||||||||||
Qualifying reserve for credit losses and other reserves(3) | 476.3 | 476.3 | 403.3 | 403.3 | |||||||||||||||
Total qualifying capital | $ | 9,535.2 | $ | 9,480.0 | $ | 9,332.1 | $ | 9,251.7 | |||||||||||
Risk-weighted assets | $ | 64,586.3 | $ | 65,068.2 | $ | 69,552.3 | $ | 70,238.0 | |||||||||||
BHC Ratios | |||||||||||||||||||
CET 1 Capital Ratio | 14.0 | % | 13.8 | % | 12.8 | % | 12.6 | % | |||||||||||
Tier 1 Capital Ratio | 14.0 | % | 13.8 | % | 12.8 | % | 12.6 | % | |||||||||||
Total Capital Ratio | 14.8 | % | 14.6 | % | 13.4 | % | 13.2 | % | |||||||||||
Tier 1 Leverage Ratio | 13.9 | % | 13.9 | % | 13.4 | % | 13.3 | % | |||||||||||
CIT Bank, N.A. Ratios | |||||||||||||||||||
CET 1 Capital Ratio | 13.4 | % | 13.2 | % | 12.8 | % | 12.6 | % | |||||||||||
Tier 1 Capital Ratio | 13.4 | % | 13.2 | % | 12.8 | % | 12.6 | % | |||||||||||
Total Capital Ratio | 14.7 | % | 14.4 | % | 13.8 | % | 13.6 | % | |||||||||||
Tier 1 Leverage Ratio | 10.9 | % | 10.8 | % | 10.9 | % | 10.7 | % |
(1) | Goodwill and disallowed intangible assets adjustments include the respective portion of deferred tax liability in accordance with guidelines under Basel III. |
(2) | Goodwill and intangible assets adjustments also reflect the portion included within assets of discontinued operations. |
(3) | “Other reserves” represents additional credit loss reserves for unfunded lending commitments, letters of credit, and deferred purchase agreements, all of which are recorded in Other Liabilities. |
December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Balance sheet assets | $ | 64,170.2 | $ | 67,391.9 | $ | 47,755.5 | |||||||||
Risk weighting adjustments to balance sheet assets | (13,241.6 | ) | (13,724.7 | ) | (8,523.3 | ) | |||||||||
Off balance sheet items | 13,657.7 | 15,885.1 | 16,248.7 | ||||||||||||
Risk-weighted assets | $ | 64,586.3 | $ | 69,552.3 | $ | 55,480.9 |
December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Total common stockholders’ equity | $ | 10,002.7 | $ | 10,944.7 | $ | 9,057.9 | |||||||||
Less: Goodwill | (685.4 | ) | (1,063.2 | ) | (432.3 | ) | |||||||||
Intangible assets | (140.7 | ) | (166.1 | ) | (16.3 | ) | |||||||||
Tangible book value | $ | 9,176.6 | $ | 9,715.4 | $ | 8,609.3 | |||||||||
Book value per share | $ | 49.50 | $ | 54.45 | $ | 50.07 | |||||||||
Tangible book value per share | $ | 45.41 | $ | 48.33 | $ | 47.59 |
(1) | Tangible book value and tangible book value per share are non-GAAP measures. |
CIT BANK
At December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
ASSETS: | |||||||||||||||
Cash and deposits with banks | $ | 4,647.2 | $ | 6,073.5 | $ | 3,684.9 | |||||||||
Investment securities | 4,035.6 | 2,577.4 | 300.5 | ||||||||||||
Assets held for sale | 927.3 | 444.2 | 22.8 | ||||||||||||
Loans | 27,246.2 | 29,346.6 | 14,988.5 | ||||||||||||
Allowance for loan losses | (406.6 | ) | (337.5 | ) | (269.5 | ) | |||||||||
Operating lease equipment, net | 3,575.8 | 2,777.8 | 2,025.7 | ||||||||||||
Indemnification Assets | 341.4 | 409.1 | – | ||||||||||||
Goodwill | 490.9 | 830.8 | 167.8 | ||||||||||||
Intangible assets | 144.0 | 163.2 | 12.1 | ||||||||||||
Other assets | 780.6 | 1,010.4 | 181.2 | ||||||||||||
Assets of discontinued operations | 448.1 | 500.5 | – | ||||||||||||
Total Assets | $ | 42,230.5 | $ | 43,796.0 | $ | 21,114.0 | |||||||||
LIABILITIES AND EQUITY: | |||||||||||||||
Deposits | $ | 32,309.1 | $ | 32,782.2 | $ | 15,785.1 | |||||||||
FHLB advances | 2,410.8 | 3,117.6 | 254.7 | ||||||||||||
Borrowings | 241.4 | 798.3 | 1,595.8 | ||||||||||||
Other liabilities | 1,145.6 | 819.5 | 769.3 | ||||||||||||
Liabilities of discontinued operations | 935.8 | 696.2 | – | ||||||||||||
Total Liabilities | 37,042.7 | 38,213.8 | 18,404.9 | ||||||||||||
Total Equity | 5,187.8 | 5,582.2 | 2,709.1 | ||||||||||||
Total Liabilities and Equity | $ | 42,230.5 | $ | 43,796.0 | $ | 21,114.0 |
At December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Common Equity Tier 1 Capital | 13.2 | % | 12.6 | % | NA | ||||||||||
Tier 1 Capital Ratio | 13.2 | % | 12.6 | % | 12.9 | % | |||||||||
Total Capital Ratio | 14.4 | % | 13.6 | % | 14.2 | % | |||||||||
Tier 1 Leverage ratio | 10.8 | % | 10.7 | % | 12.1 | % |
* | The capital ratios presented above for December 31, 2016 and 2015 are reflective of the fully-phased in Basel III approach. |
At December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Commercial Banking | $ | 24,707.5 | $ | 25,337.2 | $ | 17,037.0 | |||||||||
Commercial Finance | 10,753.3 | 13,067.0 | 9,498.9 | ||||||||||||
Real Estate Finance | 5,566.6 | 5,368.5 | 1,766.5 | ||||||||||||
Business Capital | 5,146.9 | 4,692.1 | 4,198.9 | ||||||||||||
Rail | 3,240.7 | 2,209.6 | 1,572.7 | ||||||||||||
Consumer Banking | $ | 7,041.8 | $ | 7,231.4 | $ | – | |||||||||
Legacy Consumer Mortgages | 4,862.7 | 5,468.4 | – | ||||||||||||
Other Consumer Banking | 2,179.1 | 1,763.0 | – | ||||||||||||
Total | $ | 31,749.3 | $ | 32,568.6 | $ | 17,037.0 |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Interest income | $ | 1,787.9 | $ | 1,214.1 | $ | 716.1 | |||||||||
Interest expense | (439.3 | ) | (358.7 | ) | (248.5 | ) | |||||||||
Net interest revenue | 1,348.6 | 855.4 | 467.6 | ||||||||||||
Provision for credit losses | (199.0 | ) | (164.1 | ) | (113.5 | ) | |||||||||
Net interest revenue, after credit provision | 1,149.6 | 691.3 | 354.1 | ||||||||||||
Rental income on operating leases | 391.9 | 299.5 | 227.2 | ||||||||||||
Other income | 309.3 | 125.0 | 122.8 | ||||||||||||
Total net revenue, net of interest expense and credit provision | 1,850.8 | 1,115.8 | 704.1 | ||||||||||||
Operating expenses | (1,069.3 | ) | (711.1 | ) | (415.8 | ) | |||||||||
Goodwill impairment | (319.4 | ) | – | – | |||||||||||
Depreciation on operating lease equipment | (161.1 | ) | (123.3 | ) | (96.2 | ) | |||||||||
Maintenance and other operating lease expenses | (22.2 | ) | (8.1 | ) | (8.2 | ) | |||||||||
Loss on debt extinguishment and deposit redemption | (10.6 | ) | – | (0.4 | ) | ||||||||||
Income before provision for income taxes | 268.2 | 273.3 | 183.5 | ||||||||||||
Provision for income taxes | (209.3 | ) | (81.5 | ) | (73.3 | ) | |||||||||
Income from continuing operations | 58.9 | 191.8 | 110.2 | ||||||||||||
Loss from discontinued operations, net of taxes | (210.1 | ) | (10.4 | ) | – | ||||||||||
Net (loss) income | $ | (151.2 | ) | $ | 181.4 | $ | 110.2 | ||||||||
New business volume — funded | $ | 9,065.5 | $ | 9,016.0 | $ | 7,845.7 |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Interest income | $ | 1,787.9 | $ | 1,214.1 | $ | 716.1 | |||||||||
Rental income on operating leases | 391.9 | 299.5 | 227.2 | ||||||||||||
Finance revenue | 2,179.8 | 1,513.6 | 943.3 | ||||||||||||
Interest expense | (439.3 | ) | (358.7 | ) | (248.5 | ) | |||||||||
Depreciation on operating lease equipment | (161.1 | ) | (123.3 | ) | (96.2 | ) | |||||||||
Maintenance and other operating lease expenses | (22.2 | ) | (8.1 | ) | (8.2 | ) | |||||||||
Net finance revenue | $ | 1,557.2 | $ | 1,023.5 | $ | 590.4 | |||||||||
Average Earning Assets (“AEA”) | $ | 41,137.5 | $ | 29,627.3 | $ | 18,383.1 | |||||||||
As a % of AEA: | |||||||||||||||
Interest income | 4.35 | % | 4.10 | % | 3.90 | % | |||||||||
Rental income on operating leases | 0.95 | % | 1.01 | % | 1.24 | % | |||||||||
Finance revenue | 5.30 | % | 5.11 | % | 5.14 | % | |||||||||
Interest expense | (1.07 | )% | (1.21 | )% | (1.36 | )% | |||||||||
Depreciation on operating lease equipment | (0.39 | )% | (0.42 | )% | (0.53 | )% | |||||||||
Maintenance and other operating lease expenses | (0.05 | )% | (0.03 | )% | (0.04 | )% | |||||||||
Net finance revenue | 3.79 | % | 3.45 | % | 3.21 | % |
CRITICAL ACCOUNTING ESTIMATES
operations as of December 31, 2016. The indemnification receivable is measured using the same assumptions used to measure the indemnified item (contingent liability) subject to management’s assessment of the collectability of the indemnification asset and any contractual limitations on the indemnified amount.
RISK MANAGEMENT
- | Strategic risk is the risk of the impact on earnings or capital arising from adverse strategic business decisions, improper implementation of strategic decisions, or lack of responsiveness to changes in the industry, including changes in the financial services industry as well as fundamental changes in the businesses in which our customers and our firm engages. |
- | Credit risk is the risk of loss and provisioning when a borrower or series of borrowers do not meet their financial obligations to the Company or their performance weakens and reserving is required. Credit risk may arise from lending, leasing, the purchase of accounts receivable in factoring and/or counterparty activities. |
- | Asset risk is the equipment valuation and residual risk of lease equipment owned by the Company that arises from fluctuations in the supply and demand for the underlying leased equipment. The Company is exposed to the risk that, at the end of the lease term, the value of the asset will be lower than expected, resulting in either reduced future lease income over the remaining life of the asset or a lower sale value. |
- | Market risk includes interest rate and foreign currency risk. Interest rate risk is the risk that fluctuations in interest rates will have an impact on the Company’s net finance revenue and on the market value of the Company’s assets, liabilities and derivatives. Foreign exchange risk is the risk that fluctuations in exchange rates between currencies can have an economic impact on the Company’s non-dollar denominated assets, liabilities and cash flows. |
- | Liquidity risk is the risk that the Company has an inability to maintain adequate cash resources and funding capacity to meet its obligations, including under stress scenarios. |
- | Capital risk is the risk that the Company does not have adequate capital to cover its risks and to support its growth and strategic objectives. |
- | Operational risk is the risk of financial loss, damage to the Company’s reputation, or other adverse impacts resulting from inadequate or failed internal processes and systems, people or external events. |
- | Information Technology Risk is the risk of financial loss, damage to the Company’s reputation or other adverse impacts resulting from unauthorized (malicious or accidental) disclosure, modification, or destruction of information, including cyber-crime, unintentional errors and omissions, IT disruptions due to natural or man-made disasters, or failure to exercise due care and diligence in the implementation and operation of an IT system. |
- | Legal and Regulatory Risk is the risk that the Company is not in compliance with applicable laws and regulations, which may result in fines, regulatory criticism or business restrictions, or damage to the Company’s reputation. |
- | Reputational Risk is the potential that negative publicity, whether true or not, will cause a decline in the value of the Company due to changes in the customer base, costly litigation, or other revenue reductions. |
- | the major risks inherent to CIT’s business activities, as defined above; |
- | the Enterprise Risk Framework, which includes the policies, procedures, practices and resources used to manage and assess these risks, and the decision-making governance structure that supports it; |
- | the Risk Appetite and Risk Tolerance Framework, which defines the level and type of risk CIT is willing to assume in its exposures and business activities, given its business objectives, and sets limits, credit authorities, target performance metrics, underwriting standards and risk acceptance criteria used to define and guide the decision-making processes; and |
- | management information systems, including data, models, analytics and risk reporting, to enable adequate identification, monitoring and reporting of risks for proactive management. |
- | Net Interest Income Sensitivity (“NII Sensitivity”), which measures the net impact of hypothetical changes in interest rates on forecasted net interest revenue and rental income assuming a static balance sheet over a twelve month period; and |
- | Economic Value of Equity (“EVE”), which measures the net impact of these hypothetical changes on the value of equity by assessing the economic value of assets, liabilities and derivatives. |
December 31, 2016 | December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
+100 bps | -100 bps | +100 bps | -100 bps | +100 bps | -100 bps | ||||||||||||||||||||||
NII Sensitivity | 3.2 | % | (2.4 | )% | 3.5 | % | (2.1 | )% | 6.4 | % | (0.8 | )% | |||||||||||||||
EVE | (2.1 | )% | 2.3 | % | 0.5 | % | (0.5 | )% | 1.9 | % | (1.6 | )% |
NII post sale estimate | EVE post sale estimate | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
+100 = 4.4% | +100 = 0.8% | |||||||||||||
-100 = (3.3)% | -100 = (0.8)% |
Compliance Officers (each, a “BUCO”) and Regional Compliance Officers (each, an “RCO”) who work with each business to advise business staff and leadership in the prudent conduct of business within a regulated environment and within the requirements of law, rule, regulation and the control environment we maintain to reduce the risk of violations or other adverse outcomes. They advise business leadership and staff with respect to the implementation of procedures to operationalize compliance policies and other requirements.
INTERNAL CONTROLS WORKING GROUP
NON-GAAP FINANCIAL MEASUREMENTS
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Total Net Revenue | |||||||||||||||
Interest income(1) | $ | 1,911.5 | $ | 1,445.2 | $ | 1,155.6 | |||||||||
Rental income on operating leases(1) | 1,031.6 | 1,018.1 | 949.6 | ||||||||||||
Finance revenue | 2,943.1 | 2,463.3 | 2,105.2 | ||||||||||||
Interest expense(1) | (753.2 | ) | (731.4 | ) | (715.1 | ) | |||||||||
Depreciation on operating lease equipment(1) | (261.1 | ) | (229.2 | ) | (229.8 | ) | |||||||||
Maintenance and other operating lease expenses(1) | (213.6 | ) | (185.1 | ) | (171.7 | ) | |||||||||
Net finance revenue | 1,715.2 | 1,317.6 | 988.6 | ||||||||||||
Other income(1) | 150.6 | 149.6 | 263.9 | ||||||||||||
Total net revenue | $ | 1,865.8 | $ | 1,467.2 | $ | 1,252.5 | |||||||||
Net Finance Margin (NFR as a % of AEA) | 3.60 | % | 3.47 | % | 3.30 | % | |||||||||
Net Operating Lease Revenue | |||||||||||||||
Rental income on operating leases(1) | $ | 1,031.6 | $ | 1,018.1 | $ | 949.6 | |||||||||
Depreciation on operating lease equipment(1) | (261.1 | ) | (229.2 | ) | (229.8 | ) | |||||||||
Maintenance and other operating lease expenses(1) | (213.6 | ) | (185.1 | ) | (171.7 | ) | |||||||||
Net operating lease revenue | $ | 556.9 | $ | 603.8 | $ | 548.1 |
(1) | Balances agree directly to the statement of income in Item 8 Financial Statements. |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Operating expenses(1) | $ | 1,283.5 | $ | 1,121.1 | $ | 900.1 | |||||||||
Provision for severance and facilities exiting activities | (36.2 | ) | (58.3 | ) | (31.4 | ) | |||||||||
Intangible asset amortization | (25.6 | ) | (13.3 | ) | (1.4 | ) | |||||||||
Operating expenses excluding restructuring costs and intangible asset amortization | $ | 1,221.7 | $ | 1,049.5 | $ | 867.3 | |||||||||
Operating expenses excluding restructuring costs as a % of AEA | 2.69 | % | 2.95 | % | 3.00 | % | |||||||||
Operating expenses exclusive of restructuring costs and intangible amortization | 2.56 | % | 2.76 | % | 2.89 | % | |||||||||
Total Net Revenue | $ | 1,865.8 | $ | 1,467.2 | $ | 1,252.5 | |||||||||
Net Efficiency Ratio | 65.5 | % | 71.5 | % | 69.2 | % |
(1) | Balances agree directly to the statement of income in Item 8 Financial Statements. |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Loans(1) | $ | 29,535.9 | $ | 30,518.7 | $ | 18,260.6 | |||||||||
Operating lease equipment, net(1) | 7,486.1 | 6,851.7 | 5,980.9 | ||||||||||||
Interest bearing cash(1) | 5,608.5 | 6,652.0 | 5,542.1 | ||||||||||||
Investment securities(1) | 4,491.1 | 2,953.7 | 1,550.3 | ||||||||||||
Assets held for sale(1) | 636.0 | 2,057.7 | 826.5 | ||||||||||||
Indemnification assets(1) | 341.4 | 409.1 | – | ||||||||||||
Securities purchased under agreements to resell(1) | – | – | 650.0 | ||||||||||||
Credit balances of factoring clients(1) | (1,292.0 | ) | (1,344.0 | ) | (1,622.1 | ) | |||||||||
Total earning assets | $ | 46,807.0 | $ | 48,098.9 | $ | 31,188.3 | |||||||||
Average Earning Assets (for the respective years) | $ | 47,664.2 | $ | 38,019.8 | $ | 29,959.3 |
(1) | Balances agree directly to the balance sheet for 2016 and 2015 in Item 8 Financial Statements. |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Total common stockholders’ equity(1) | $ | 10,002.7 | $ | 10,944.7 | $ | 9,057.9 | |||||||||
Less: Goodwill(1) | (685.4 | ) | (1,063.2 | ) | (432.3 | ) | |||||||||
Intangible assets(1) | (140.7 | ) | (166.1 | ) | (16.3 | ) | |||||||||
Tangible book value | 9,176.6 | 9,715.4 | 8,609.3 | ||||||||||||
Less: Disallowed deferred tax asset for regulatory capital | (213.7 | ) | (908.3 | ) | (375.0 | ) | |||||||||
Adjusted tangible common equity | $ | 8,962.9 | $ | 8,807.1 | $ | 8,234.3 | |||||||||
Average adjusted tangible common equity | $ | 9,172.3 | $ | 8,318.7 | $ | 8,313.5 | |||||||||
Non-GAAP net income (reconciled below) | $ | 709.9 | $ | 606.4 | $ | 703.9 | |||||||||
Intangible asset amortization, after tax | 15.7 | 9.8 | 1.3 | ||||||||||||
Non-GAAP net income for ROTCE calculation | $ | 725.6 | $ | 616.2 | $ | 705.2 | |||||||||
Return on average tangible common equity, after noteworthy items | 7.91 | % | 7.41 | % | 8.48 | % |
(1) | Balances agree directly to the balance sheet for 2016 and 2015 in Item 8 Financial Statements. |
5. | Net income excluding noteworthy items and income from continuing operations excluding noteworthy items |
Description | | Year Ended December 31, 2016 | | Year Ended December 31, 2015 | | Year Ended December 31, 2014 | | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Net (loss) income | $ | (848 | ) | $ | (4.20 | ) | $ | 1,034 | $ | 5.55 | $ | 1,119 | $ | 5.91 | |||||||||||||||||
Gain on Sale — UK Business | (15 | ) | (0.07 | ) | – | – | – | – | |||||||||||||||||||||||
Discrete Tax Benefit | (13 | ) | (0.06 | ) | 71 | 0.38 | (30 | ) | (0.16 | ) | |||||||||||||||||||||
Impairments on AHFS and Other | 8 | 0.04 | 23 | 0.12 | 55 | 0.29 | |||||||||||||||||||||||||
Liquidating Europe CTA | 3 | 0.01 | – | – | – | – | |||||||||||||||||||||||||
China Tax Valuation Allowance | 16 | 0.08 | – | – | – | – | |||||||||||||||||||||||||
Canadian TRS Termination Charge | 146 | 0.72 | – | – | – | – | |||||||||||||||||||||||||
Consumer Goodwill Impairment | 319 | 1.58 | – | – | – | – | |||||||||||||||||||||||||
Commercial Services Goodwill Impairment | 28 | 0.14 | – | – | – | – | |||||||||||||||||||||||||
Continuing Operations | Canadian Tax Assertion Change | 54 | 0.27 | – | – | – | – | ||||||||||||||||||||||||
Gain on Sale — Canadian Businesses | (16 | ) | (0.08 | ) | – | – | – | – | |||||||||||||||||||||||
OneWest Bank Legacy Matters | 17 | 0.08 | – | – | – | – | |||||||||||||||||||||||||
Gain Related to IndyMac Venture | (3 | ) | (0.01 | ) | – | – | – | – | |||||||||||||||||||||||
Partial Tax Valuation Allowance Reversal | – | – | (647 | ) | (3.47 | ) | (375 | ) | (1.98 | ) | |||||||||||||||||||||
International Tax Valuation Allowance Reversal | – | – | – | – | (44 | ) | (0.23 | ) | |||||||||||||||||||||||
Currency Translation Adjustments on Portfolio Sales | – | – | 74 | 0.40 | – | – | |||||||||||||||||||||||||
Transaction Costs | – | – | 15 | 0.08 | – | – | |||||||||||||||||||||||||
Restructuring | 23 | 0.11 | 36 | 0.19 | 31 | 0.17 | |||||||||||||||||||||||||
Financial Freedom Interest Curtailment Reserve | 179 | 0.89 | – | – | – | – | |||||||||||||||||||||||||
Business Air Impairments | 18 | 0.09 | – | – | – | – | |||||||||||||||||||||||||
Reverse Mortgage Servicing Rights Impairment | 12 | 0.06 | – | – | – | – | |||||||||||||||||||||||||
Discontinued Operations | Commercial Air Tax Provision | 847 | 4.20 | – | – | – | – | ||||||||||||||||||||||||
Commercial Air Suspended Depreciation | (66 | ) | (0.33 | ) | – | – | – | – | |||||||||||||||||||||||
Gain on Student Loan Portfolio Sale | – | – | – | – | (53 | ) | (0.28 | ) | |||||||||||||||||||||||
Non-GAAP net income, excluding noteworthy items(1) | $ | 710 | $ | 3.52 | $ | 606 | $ | 3.25 | $ | 704 | $ | 3.72 | |||||||||||||||||||
(Loss) income from continuing operations | $ | (183 | ) | $ | (0.90 | ) | $ | 724 | $ | 3.89 | $ | 676 | $ | 3.57 | |||||||||||||||||
Gain on Sale — UK Business | (15 | ) | (0.07 | ) | – | – | – | – | |||||||||||||||||||||||
Discrete Tax Benefit | (13 | ) | (0.06 | ) | 71 | 0.38 | (30 | ) | (0.16 | ) | |||||||||||||||||||||
Impairments on AHFS and Other | 8 | 0.04 | 23 | 0.12 | 55 | 0.29 | |||||||||||||||||||||||||
Liquidating Europe CTA | 3 | 0.01 | – | – | – | – | |||||||||||||||||||||||||
China Tax Valuation Allowance | 16 | 0.08 | – | – | – | – | |||||||||||||||||||||||||
Canadian TRS Termination Charge | 146 | 0.72 | – | – | – | – | |||||||||||||||||||||||||
Consumer Goodwill Impairment | 319 | 1.58 | – | – | – | – | |||||||||||||||||||||||||
Commercial Services Goodwill Impairment | 28 | 0.14 | – | – | – | – | |||||||||||||||||||||||||
Continuing Operations | Canadian Tax Assertion Change | 54 | 0.27 | – | – | – | – | ||||||||||||||||||||||||
Gain on Sale — Canadian Businesses | (16 | ) | (0.08 | ) | – | – | – | – | |||||||||||||||||||||||
OneWest Bank Legacy Matters | 17 | 0.08 | – | – | – | – | |||||||||||||||||||||||||
Gain Related to IndyMac Venture | (3 | ) | (0.01 | ) | – | – | – | – | |||||||||||||||||||||||
Partial Tax Valuation Allowance Reversal | – | – | (647 | ) | (3.47 | ) | (375 | ) | (1.98 | ) | |||||||||||||||||||||
International Tax Valuation Allowance Reversal | – | – | – | – | (44 | ) | (0.23 | ) | |||||||||||||||||||||||
Currency Translation Adjustments on Portfolio Sales | – | – | 74 | 0.40 | – | – | |||||||||||||||||||||||||
Transaction Costs | – | – | 15 | 0.08 | – | – | |||||||||||||||||||||||||
Restructuring | 23 | 0.11 | 36 | 0.19 | 31 | 0.17 | |||||||||||||||||||||||||
Non-GAAP income from continuing operations, excluding noteworthy items(1) | $ | 385 | $ | 1.91 | $ | 296 | $ | 1.59 | $ | 313 | $ | 1.65 |
(1) | Balances may not sum due to rounding . |
December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Total assets(1) | $ | 64,170.2 | $ | 67,391.9 | $ | 47,755.5 | |||||||||
Assets of discontinued operation(1) | (13,220.7 | ) | (13,059.6 | ) | (12,493.7 | ) | |||||||||
Continuing operations total assets | $ | 50,949.5 | $ | 54,332.3 | $ | 35,261.8 |
(1) | Balances agree directly to the balance sheet for 2016 and 2015 in Item 8 Financial Statements. |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Provision (benefit) for income taxes | $ | 203.5 | (538.0 | ) | $ | (432.4 | ) | ||||||||
Less: Discrete tax items | (60.0 | ) | 617.5 | 451.9 | |||||||||||
Provision for income taxes, before discrete tax items | $ | 143.5 | $ | 79.5 | $ | 19.5 | |||||||||
Income from continuing operations, before provision for income taxes | $ | 20.9 | $ | 186.0 | $ | 244.5 | |||||||||
Effective tax rate | 978.0 | % | (289.2 | )% | (176.8 | )% | |||||||||
Effective tax rate, before discrete items | 689.4 | % | 42.8 | % | 8.0 | % |
FORWARD-LOOKING STATEMENTS
- | our liquidity risk and capital management, including our capital plan, leverage, capital ratios, and credit ratings, our liquidity plan, and our plans and the potential transactions designed to enhance our liquidity and capital, to repay secured and unsecured debt, to issue qualifying capital instruments, including Tier 1 qualifying preferred stock, and for a return of capital, |
- | our plans to change our funding mix and to access new sources of funding to broaden our use of deposit taking capabilities, |
- | our pending or potential acquisition and disposition plans, and the integration and restructuring risks inherent in such acquisitions, including our previous acquisition of OneWest Bank in August 2015, our pending sale of the Commercial Air business, and our proposed sale of our Financial Freedom reverse mortgage business and our Business Air loan portfolio, |
- | our credit risk management and credit quality, |
- | our asset/liability risk management, |
- | our funding, borrowing costs and net finance revenue, |
- | our operational risks, including risk of operational errors, failure of operational controls, success of systems enhancements and expansion of risk management and control functions, |
- | our mix of portfolio asset classes, including changes resulting from growth initiatives, new business initiatives, new products, acquisitions and divestitures, new business and customer retention, |
- | legal risks, including related to the enforceability of our agreements and to changes in laws and regulations, |
- | our growth rates, |
- | our commitments to extend credit or purchase equipment, and |
- | how we may be affected by legal proceedings. |
- | capital markets liquidity, |
- | risks inherent in a return of capital, including risks related to obtaining regulatory approval, the nature and allocation among different methods of returning capital, and the amount and timing of any capital return, |
- | risks of and/or actual economic slowdown, downturn or recession, |
- | industry cycles and trends, |
- | uncertainties associated with risk management, including credit, prepayment, asset/liability, interest rate and currency risks, |
- | adequacy of reserves for credit losses, |
- | risks inherent in changes in market interest rates and quality spreads, |
- | funding opportunities, deposit taking capabilities and borrowing costs, |
- | conditions and/or changes in funding markets and our access to such markets, including the secured and unsecured debt and asset-backed securitization markets, |
- | risks of implementing new processes, procedures, and systems, including any new processes, procedures, and systems required to comply with the additional laws and regulations applicable to systematically important financial institutions, |
- | risks associated with the value and recoverability of leased equipment and related lease residual values, |
- | risks of failing to achieve the projected revenue growth from new business initiatives or the projected expense reductions from efficiency improvements, |
- | application of fair value accounting in volatile markets, |
- | application of goodwill accounting in a recessionary economy, |
- | changes in laws or regulations governing our business and operations, or affecting our assets, including our operating lease equipment, |
- | changes in competitive factors, |
- | demographic trends, |
- | customer retention rates, |
- | risks associated with dispositions of businesses or asset portfolios, including how to replace the income associated with such businesses or asset portfolios and the risk of residual liabilities from such businesses or portfolios, |
- | risks associated with acquisitions of businesses or asset portfolios and the risks of integrating such acquisitions, including the integration of OneWest Bank, and |
- | regulatory changes and/or developments. |
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
New York, New York
March 15, 2017
CIT GROUP INC. AND SUBSIDIARIES
December 31, 2016 | December 31, 2015 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Assets | |||||||||||
Cash and due from banks, including restricted balances of $176.1 and $150.2 at December 31, 2016 and 2015(1), respectively (see Note 10 for amounts pledged) | $ | 822.1 | $ | 1,000.4 | |||||||
Interest bearing deposits, including restricted balances of $102.8 and $182.5 at December 31, 2016 and 2015(1), respectively (see Note 10 for amounts pledged) | 5,608.5 | 6,652.0 | |||||||||
Investment securities, including $283.5 and $339.7 at December 31, 2016 and December 31, 2015 of securities carried at fair value with changes recorded in net income (see Note 10 for amounts pledged) | 4,491.1 | 2,953.7 | |||||||||
Assets held for sale(1) | 636.0 | 2,057.7 | |||||||||
Loans (see Note 10 for amounts pledged) | 29,535.9 | 30,518.7 | |||||||||
Allowance for loan losses | (432.6 | ) | (347.0 | ) | |||||||
Total loans, net of allowance for loan losses(1) | 29,103.3 | 30,171.7 | |||||||||
Operating lease equipment, net (see Note 10 for amounts pledged)(1) | 7,486.1 | 6,851.7 | |||||||||
Indemnification assets | 341.4 | 409.1 | |||||||||
Unsecured counterparty receivable | 394.5 | 537.8 | |||||||||
Goodwill | 685.4 | 1,063.2 | |||||||||
Intangible assets | 140.7 | 166.1 | |||||||||
Other assets, including $111.6 and $195.9 at December 31, 2016 and 2015, respectively, at fair value | 1,240.4 | 2,468.9 | |||||||||
Assets of discontinued operations | 13,220.7 | 13,059.6 | |||||||||
Total Assets | $ | 64,170.2 | $ | 67,391.9 | |||||||
Liabilities | |||||||||||
Deposits | $ | 32,304.3 | $ | 32,761.4 | |||||||
Credit balances of factoring clients | 1,292.0 | 1,344.0 | |||||||||
Other liabilities, including $177.9 and $220.3 at December 31, 2016 and 2015, respectively, at fair value | 1,897.6 | 1,689.0 | |||||||||
Borrowings, including $2,321.7 and $3,091.3 contractually due within twelve months at December 31, 2016 and December 31, 2015, respectively | 14,935.5 | 16,350.3 | |||||||||
Liabilities of discontinued operations | 3,737.7 | 4,302.0 | |||||||||
Total Liabilities | 54,167.1 | 56,446.7 | |||||||||
Stockholders’ Equity | |||||||||||
Common stock: $0.01 par value, 600,000,000 authorized | |||||||||||
Issued: 206,182,213 and 204,447,769 at December 31, 2016 and December 31, 2015, respectively | 2.1 | 2.0 | |||||||||
Outstanding: 202,087,672 and 201,021,508 at December 31, 2016 and December 31, 2015, respectively | |||||||||||
Paid-in capital | 8,765.8 | 8,718.1 | |||||||||
Retained earnings | 1,553.0 | 2,524.0 | |||||||||
Accumulated other comprehensive loss | (140.1 | ) | (142.1 | ) | |||||||
Treasury stock: 4,094,541 and 3,426,261 shares at December 31, 2016 and December 31, 2015 at cost, respectively | (178.1 | ) | (157.3 | ) | |||||||
Total Common Stockholders’ Equity | 10,002.7 | 10,944.7 | |||||||||
Noncontrolling minority interests | 0.4 | 0.5 | |||||||||
Total Equity | 10,003.1 | 10,945.2 | |||||||||
Total Liabilities and Equity | $ | 64,170.2 | $ | 67,391.9 |
(1) | The following table presents information on assets and liabilities related to Variable Interest Entities (VIEs) that are consolidated by the Company. The difference between VIE total assets and total liabilities represents the Company’s interests in those entities, which were eliminated in consolidation. The assets of the consolidated VIEs will be used to settle the liabilities of those entities and, except for the Company’s interest in the VIEs, are not available to the creditors of CIT or any affiliates of CIT. |
Assets | ||||||||||||
Cash and interest bearing deposits, restricted | $ | 99.9 | $ | 276.9 | ||||||||
Assets held for sale | – | 279.7 | ||||||||||
Total loans, net of allowance for loan losses | 300.5 | 2,217.5 | ||||||||||
Operating lease equipment, net | 775.8 | 797.2 | ||||||||||
Other | – | 11.2 | ||||||||||
Assets of discontinued operations | 2,321.7 | 3,402.4 | ||||||||||
Total Assets | $ | 3,497.9 | $ | 6,984.9 | ||||||||
Liabilities | ||||||||||||
Beneficial interests issued by consolidated VIEs (classified as long-term borrowings) | $ | 770.0 | $ | 1,948.7 | ||||||||
Liabilities of discontinued operations | 1,204.6 | 2,082.1 | ||||||||||
Total Liabilities | $ | 1,974.6 | $ | 4,030.8 |
CIT GROUP INC. AND SUBSIDIARIES
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Interest income | |||||||||||||||
Interest and fees on loans | $ | 1,779.6 | $ | 1,374.0 | $ | 1,120.1 | |||||||||
Other interest and dividends | 131.9 | 71.2 | 35.5 | ||||||||||||
Interest income | 1,911.5 | 1,445.2 | 1,155.6 | ||||||||||||
Interest expense | |||||||||||||||
Interest on borrowings | (358.4 | ) | (401.3 | ) | (484.1 | ) | |||||||||
Interest on deposits | (394.8 | ) | (330.1 | ) | (231.0 | ) | |||||||||
Interest expense | (753.2 | ) | (731.4 | ) | (715.1 | ) | |||||||||
Net interest revenue | 1,158.3 | 713.8 | 440.5 | ||||||||||||
Provision for credit losses | (194.7 | ) | (158.6 | ) | (104.4 | ) | |||||||||
Net interest revenue, after credit provision | 963.6 | 555.2 | 336.1 | ||||||||||||
Non-interest income | |||||||||||||||
Rental income on operating leases | 1,031.6 | 1,018.1 | 949.6 | ||||||||||||
Other income | 150.6 | 149.6 | 263.9 | ||||||||||||
Total non-interest income | 1,182.2 | 1,167.7 | 1,213.5 | ||||||||||||
Total revenue, net of interest expense and credit provision | 2,145.8 | 1,722.9 | 1,549.6 | ||||||||||||
Non-interest expenses | |||||||||||||||
Depreciation on operating lease equipment | (261.1 | ) | (229.2 | ) | (229.8 | ) | |||||||||
Maintenance and other operating lease expenses | (213.6 | ) | (185.1 | ) | (171.7 | ) | |||||||||
Operating expenses | (1,283.5 | ) | (1,121.1 | ) | (900.1 | ) | |||||||||
Goodwill impairment | (354.2 | ) | – | – | |||||||||||
Loss on debt extinguishment and deposit redemption | (12.5 | ) | (1.5 | ) | (3.5 | ) | |||||||||
Total other expenses | (2,124.9 | ) | (1,536.9 | ) | (1,305.1 | ) | |||||||||
Income from continuing operations before (provision) benefit for income taxes | 20.9 | 186.0 | 244.5 | ||||||||||||
(Provision) benefit for income taxes | (203.5 | ) | 538.0 | 432.4 | |||||||||||
(Loss) income from continuing operations before attribution of noncontrolling interests | (182.6 | ) | 724.0 | 676.9 | |||||||||||
Loss (income) attributable to noncontrolling interests, after tax | – | 0.1 | (1.2 | ) | |||||||||||
(Loss) income from continuing operations | (182.6 | ) | 724.1 | 675.7 | |||||||||||
Discontinued operations | |||||||||||||||
(Loss) income from discontinued operations, net of taxes | (665.4 | ) | 310.0 | 160.6 | |||||||||||
Gain on sale of discontinued operations, net of taxes | – | – | 282.8 | ||||||||||||
Total (loss) income from discontinued operations, net of taxes | (665.4 | ) | 310.0 | 443.4 | |||||||||||
Net (loss) income | $ | (848.0 | ) | $ | 1,034.1 | $ | 1,119.1 | ||||||||
Basic income per common share | |||||||||||||||
(Loss) income from continuing operations | $ | (0.90 | ) | $ | 3.90 | $ | 3.59 | ||||||||
(Loss) income from discontinued operations, net of taxes | (3.30 | ) | 1.67 | 2.35 | |||||||||||
Basic (loss) income per common share | $ | (4.20 | ) | $ | 5.57 | $ | 5.94 | ||||||||
Diluted income per common share | |||||||||||||||
(Loss) income from continuing operations | $ | (0.90 | ) | $ | 3.89 | $ | 3.57 | ||||||||
(Loss) income from discontinued operations, net of taxes | (3.30 | ) | 1.66 | 2.34 | |||||||||||
Diluted (loss) income per common share | $ | (4.20 | ) | $ | 5.55 | $ | 5.91 | ||||||||
Average number of common shares — (thousands) | |||||||||||||||
Basic | 201,850 | 185,500 | 188,491 | ||||||||||||
Diluted | 201,850 | 186,388 | 189,463 | ||||||||||||
Dividends declared per common share | $ | 0.60 | $ | 0.60 | $ | 0.50 |
CIT GROUP INC. AND SUBSIDIARIES
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Net (Loss) income before attribution of noncontrolling interests | $ | (848.0 | ) | $ | 1,034.0 | $ | 1,120.3 | ||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Foreign currency translation adjustments | 4.3 | 9.7 | (26.0 | ) | |||||||||||
Changes in fair values of derivatives qualifying as cash flow hedges | – | – | 0.2 | ||||||||||||
Net unrealized gains (losses) on available for sale securities | (6.3 | ) | (7.1 | ) | (0.1 | ) | |||||||||
Changes in benefit plans net gain (loss) and prior service (cost)/credit | 4.0 | (10.8 | ) | (34.4 | ) | ||||||||||
Other comprehensive income (loss), net of tax | 2.0 | (8.2 | ) | (60.3 | ) | ||||||||||
Comprehensive (loss) income before noncontrolling interests | (846.0 | ) | 1,025.8 | 1,060.0 | |||||||||||
Comprehensive loss (income) attributable to noncontrolling interests | – | 0.1 | (1.2 | ) | |||||||||||
Comprehensive (loss) income | $ | (846.0 | ) | $ | 1,025.9 | $ | 1,058.8 |
CIT GROUP INC. AND SUBSIDIARIES
Common Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Minority Interests | Total Equity | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2013 | $ | 2.0 | $ | 8,555.4 | $ | 581.0 | $ | (73.6 | ) | $ | (226.0 | ) | $ | 11.2 | $ | 8,850.0 | ||||||||||||||
Net income | 1,119.1 | 1.2 | 1,120.3 | |||||||||||||||||||||||||||
Other comprehensive income, net of tax | (60.3 | ) | (60.3 | ) | ||||||||||||||||||||||||||
Dividends paid | (95.3 | ) | (95.3 | ) | ||||||||||||||||||||||||||
Amortization of restricted stock, stock option, and performance share expenses | 47.1 | (17.0 | ) | 30.1 | ||||||||||||||||||||||||||
Repurchase of common stock | (775.5 | ) | (775.5 | ) | ||||||||||||||||||||||||||
Employee stock purchase plan | 1.1 | 1.1 | ||||||||||||||||||||||||||||
Distribution of earnings and capital | (17.8 | ) | (17.8 | ) | ||||||||||||||||||||||||||
December 31, 2014 | $ | 2.0 | $ | 8,603.6 | $ | 1,604.8 | $ | (133.9 | ) | $ | (1,018.5 | ) | $ | (5.4 | ) | $ | 9,052.6 | |||||||||||||
Net income | 1,034.1 | (0.1 | ) | 1,034.0 | ||||||||||||||||||||||||||
Other comprehensive income, net of tax | (8.2 | ) | (8.2 | ) | ||||||||||||||||||||||||||
Dividends paid | (114.9 | ) | (114.9 | ) | ||||||||||||||||||||||||||
Amortization of restricted stock, stock option, and performance share expenses | 93.4 | (23.4 | ) | 70.0 | ||||||||||||||||||||||||||
Repurchase of common stock | (531.8 | ) | (531.8 | ) | ||||||||||||||||||||||||||
Issuance of common stock — acquisition | 45.6 | 1,416.4 | 1,462.0 | |||||||||||||||||||||||||||
Employee stock purchase plan | 2.0 | 2.0 | ||||||||||||||||||||||||||||
Distribution of earnings and capital | (26.5 | ) | 6.0 | (20.5 | ) | |||||||||||||||||||||||||
December 31, 2015 | $ | 2.0 | $ | 8,718.1 | $ | 2,524.0 | $ | (142.1 | ) | $ | (157.3 | ) | $ | 0.5 | $ | 10,945.2 | ||||||||||||||
Net loss | (848.0 | ) | – | (848.0 | ) | |||||||||||||||||||||||||
Other comprehensive income, net of tax | 2.0 | 2.0 | ||||||||||||||||||||||||||||
Dividends paid | (123.0 | ) | (123.0 | ) | ||||||||||||||||||||||||||
Amortization of restricted stock, stock option, and performance shares and other expenses | 0.1 | 45.4 | (20.8 | ) | 24.7 | �� | ||||||||||||||||||||||||
Employee stock purchase plan | 2.3 | – | 2.3 | |||||||||||||||||||||||||||
Other | (0.1 | ) | (0.1 | ) | ||||||||||||||||||||||||||
December 31, 2016 | $ | 2.1 | $ | 8,765.8 | $ | 1,553.0 | $ | (140.1 | ) | $ | (178.1 | ) | $ | 0.4 | $ | 10,003.1 |
CIT GROUP INC. AND SUBSIDIARIES
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Cash Flows From Operations | |||||||||||||||
Net (loss) income | $ | (848.0 | ) | $ | 1,034.1 | $ | 1,119.1 | ||||||||
Adjustments to reconcile net (loss) income to net cash flows from operations: | |||||||||||||||
Provision for credit losses | 210.3 | 160.5 | 100.1 | ||||||||||||
Net depreciation, amortization and (accretion) | 700.0 | 783.9 | 973.2 | ||||||||||||
Net losses (gains) on asset sales and other | 158.8 | 5.1 | (338.4 | ) | |||||||||||
Provision (benefit) for deferred income taxes | 983.5 | (572.9 | ) | (433.5 | ) | ||||||||||
(Increase) decrease in finance receivables held for sale | 336.7 | (251.3 | ) | (161.9 | ) | ||||||||||
Goodwill impairment | 358.4 | 15.0 | – | ||||||||||||
Reimbursement of OREO expenses from FDIC | 1.8 | 7.2 | – | ||||||||||||
Decrease (increase) in other assets | 1,165.1 | 53.3 | (179.2 | ) | |||||||||||
(Decrease) increase in other liabilities | (699.7 | ) | (67.3 | ) | 299.0 | ||||||||||
Net cash flows provided by operations | 2,366.9 | 1,167.6 | 1,378.4 | ||||||||||||
Cash Flows From Investing Activities | |||||||||||||||
Change in loans, net | 824.0 | (1,759.2 | ) | (1,862.9 | ) | ||||||||||
Purchases of investment securities | (4,939.2 | ) | (8,316.3 | ) | (10,024.3 | ) | |||||||||
Proceeds from maturities of investment securities | 3,585.5 | 9,226.6 | 10,461.2 | ||||||||||||
Proceeds from sales | 1,753.9 | 2,252.4 | 3,688.1 | ||||||||||||
Purchases of assets to be leased and other equipment | (1,866.8 | ) | (3,088.7 | ) | (3,058.3 | ) | |||||||||
Net (increase) decrease in short-term factoring receivables | (170.6 | ) | 124.7 | (8.0 | ) | ||||||||||
Purchases of restricted stock | (1.7 | ) | (128.9 | ) | (5.9 | ) | |||||||||
Proceeds from redemption of restricted stock | 25.5 | 20.3 | 2.4 | ||||||||||||
Payments to the FDIC under loss share agreements | (2.9 | ) | (18.1 | ) | – | ||||||||||
Proceeds from FDIC under loss share agreements and participation agreements | 147.8 | 33.7 | – | ||||||||||||
Proceeds from the sale of OREO, net of repurchases | 129.2 | 60.8 | – | ||||||||||||
Acquisition, net of cash received | – | 2,521.2 | (448.6 | ) | |||||||||||
Net change in restricted cash | 16.4 | 156.7 | 93.8 | ||||||||||||
Net cash flows provided by (used in) investing activities | (498.9 | ) | 1,085.2 | (1,162.5 | ) | ||||||||||
Cash Flows From Financing Activities | |||||||||||||||
Proceeds from the issuance of term debt | 786.1 | 1,626.9 | 3,875.2 | ||||||||||||
Repayments of term debt | (2,620.5 | ) | (4,325.3 | ) | (5,762.9 | ) | |||||||||
Proceeds from FHLB advances | 1,645.5 | 5,964.1 | 308.6 | ||||||||||||
Repayments of FHLB debt | (2,352.3 | ) | (6,070.2 | ) | (88.6 | ) | |||||||||
Net (decrease) increase in deposits | (448.6 | ) | 2,419.2 | 3,310.6 | |||||||||||
Collection of security deposits and maintenance funds | 341.7 | 330.9 | 332.2 | ||||||||||||
Use of security deposits and maintenance funds | (149.3 | ) | (147.5 | ) | (163.0 | ) | |||||||||
Repurchase of common stock | – | (531.8 | ) | (775.5 | ) | ||||||||||
Dividends paid | (123.0 | ) | (114.9 | ) | (95.3 | ) | |||||||||
Purchase of noncontrolling interest | – | (20.5 | ) | – | |||||||||||
Payments on affordable housing investment credits | (8.4 | ) | (4.8 | ) | – | ||||||||||
Net cash flows (used in) provided by financing activities | (2,928.8 | ) | (873.9 | ) | 941.3 | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | (34.6 | ) | (63.8 | ) | (82.8 | ) | |||||||||
Increase (decrease) in unrestricted cash and cash equivalents | (1,095.4 | ) | 1,315.1 | 1,074.4 | |||||||||||
Unrestricted cash and cash equivalents, beginning of period | 7,470.6 | 6,155.5 | 5,081.1 | ||||||||||||
Unrestricted cash and cash equivalents, end of period | $ | 6,375.2 | $ | 7,470.6 | $ | 6,155.5 | |||||||||
Supplementary Cash Flow Disclosure | |||||||||||||||
Interest paid | $ | (1,149.7 | ) | $ | (1,112.0 | ) | $ | (1,075.6 | ) | ||||||
Federal, foreign, state and local income taxes (paid) collected, net | $ | 61.2 | $ | (9.5 | ) | $ | (21.6 | ) | |||||||
Supplementary Non Cash Flow Disclosure | |||||||||||||||
Transfer of assets from held for investment to held for sale | $ | 2,093.6 | $ | 3,039.4 | $ | 2,671.0 | |||||||||
Transfer of assets from held for sale to held for investment | $ | 124.4 | $ | 208.7 | $ | 64.9 | |||||||||
Transfers of assets from held for investment to OREO | $ | 90.2 | $ | 65.8 | $ | – | |||||||||
Deposits on flight equipment purchases applied to acquisition of flight equipment, capitalized interest and buyer furnished equipment | $ | 286.6 | $ | 554.2 | $ | 589.4 | |||||||||
Issuance of common stock as consideration | $ | – | $ | 1,462.0 | $ | – |
strength, and the severity of loss in the event of default, considering the quality of the underlying collateral. The probability of default and severity are derived through historical observations of default and subsequent losses within each risk grading.
accretable discount should expected cash flows improve or used to absorb incurred losses as they occur.
- | the length of time that fair value has been below cost; |
- | the severity of the impairment or the extent to which fair value has been below cost; |
- | the cause of the impairment and the financial condition and the near-term prospects of the issuer; |
- | activity in the market of the issuer that may indicate adverse credit conditions; and |
- | the Company’s ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery. |
- | analysis of individual investments that have fair values less than amortized cost, including consideration of the length of time the investment has been in an unrealized loss position and the expected recovery period; |
- | discussion of evidential matter, including an evaluation of factors or triggers that could cause individual investments to qualify as having OTTI and those that would not support OTTI; and |
- | documentation of the results of these analyses, as required under business policies. |
- | Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as certain other securities that are highly liquid and are actively traded in over-the-counter markets; |
- | Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes derivative contracts and certain loans held-for-sale; |
- | Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using valuation models, discounted cash flow methodologies or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes highly structured or long-term derivative contracts and structured finance securities where independent pricing information cannot be obtained for a significant portion of the underlying assets or liabilities. |
- | CIT classifies the entire cash flow, including the premium, as investing outflow in the period of acquisition and on a subsequent basis, the premium amortization is classified in investing as a positive adjustment under a constructive receipts model. Under the constructive receipts model, similar to the cumulative earnings approach, CIT compares the cash receipts to the investment from inception to date. The Company first allocates cash receipts to operating activities based on earned interest income, with the remaining allocated to Investing activities when received in cash. |
- | CIT classifies the entire cash flow, net of the discount, as investing outflow in the period of acquisition and on a subsequent basis, the discount accretion is classified in investing as a negative adjustment under a constructive receipts model. The Company first allocates cash receipts to operating activities based on earned interest income, with the remaining allocated to Investing activities when received in cash. |
1. | Entities must perform a going concern assessment by evaluating their ability to meet their obligations for a look-forward period of one year from the financial statement issuance date (or date the financial statements are available to be issued). |
2. | Disclosures are required if it is probable an entity will be unable to meet its obligations within the look-forward period. Incremental substantial doubt disclosure is required if the probability is not mitigated by management’s plans. |
3. | Pursuant to the ASU, substantial doubt about an entity’s ability to continue as a going concern exists if it is probable that the entity will be unable to meet its obligations as they become due within one year after the date the annual or interim financial statements are issued or available to be issued (assessment date). |
- | ASU 2014-09, Revenue from Contracts with Customers (Topic 606) |
- | ASU 2015-14,Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date; |
- | ASU 2016-02,Leases (Topic 842); |
- | ASU 2016-05,Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships; |
- | ASU 2016-06,Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments; |
- | ASU 2016-07, Investments —Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting; |
- | ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net); |
- | ASU 2016-09,Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting; |
- | ASU 2016-10,Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; |
- | ASU 2016-11,Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC guidance because of ASU 2014-09 and ASU 2014-16 pursuant to staff announcements at the March 3, 2016 EITF meeting; |
- | ASU 2016-12,Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients; |
- | ASU 2016-13,Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments; |
- | ASU 2016-15,Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. |
- | ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory |
- | ASU 2016-18,Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) |
- | ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers |
1. | Identify the contract with the customer. |
2. | Identify the performance obligations in the contract. |
3. | Determine the transaction price. |
4. | Allocate the transaction price to the performance obligations. |
5. | Recognize revenue when or as each performance obligation is satisfied. |
- | ASU 2015-14 defers the effective date of the new revenue standard for public and nonpublic entities reporting under U.S. GAAP for one year to effective for fiscal years beginning after December 15, 2017. |
- | ASU 2016-08 Revenue from Contracts with Customers: Principal versus Agent Considerations, |
- | ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, |
- | ASC 2016-11, Rescission of Certain SEC Staff Observer Comments upon Adoption of Topic 606, Revenue from Contracts with Customers, |
- | ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients, |
- | ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers |
- | Lessor accounting: Given limited changes to Lessor accounting, we do not expect material changes to recognition or measurement. Current lease administration and/or reporting systems and processes will need to be evaluated and updated |
as required to ensure appropriate lease-type identification and classification. |
- | Lessee accounting: The new standard will result in virtually all leases being reflected on the balance sheet. The impact on lessee accounting also includes identification of any embedded leases included in service contracts that CIT has with vendors. |
- | Supersede current guidance to classify equity securities into different categories (i.e. trading or available-for-sale); |
- | Require equity investments to be measured at fair value with changes in fair value recognized in net income, rather than other comprehensive income. This excludes those investments accounted for under the equity method, or those that result in consolidation of the investee; |
- | Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment (similar to goodwill); |
- | Eliminate the requirement to disclose the method(s) and significant assumptions used to estimate fair value that is required to be disclosed for financial instruments measured at amortized cost; |
- | Require the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes; |
- | Require an entity to present separately in other comprehensive income the portion of the change in fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with fair value option for financial instruments; |
- | Require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e. securities, or loans and receivables) on the balance sheet or accompanying notes to the financial statements; and |
- | Clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. |
- | Use of an ALLL approach (versus permanently writing down the security’s cost basis) for impairment; |
- | Limit the ALLL to the amount at which the security’s fair value is less than its amortized cost basis; |
- | Removing the consideration for the length of time fair value has been less than amortized cost when assessing credit loss; |
- | Removing the consideration for recoveries in fair value after the balance sheet date when assessing whether a credit loss exists. |
- | Issue 1 — Debt prepayment or debt extinguishment costs — Cash payments for debt prepayment or debt extinguishment costs should be classified as cash outflows for financing activities. |
- | Issue 2 — Settlement of zero-coupon debt instruments — Cash payments for the settlement of zero-coupon debt instruments, including other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, should be classified as cash outflows for operating activities for the portion attributable to interest and as cash outflows for financing activities for the portion attributable to principal. |
- | Issue 3 — Contingent consideration payments made after a business combination — Cash payments made soon after an acquisition’s consummation date (i.e., approximately three months or less) should be classified as cash outflows for investing activities. Payments made thereafter should be classified as cash outflows for financing activities up to the amount of the original contingent consideration liability. Payments made in excess of the amount of the original contingent consideration liability should be classified as cash outflows for operating activities. |
- | Issue 4 — Proceeds from the settlement of insurance claim — Cash payments received from the settlement of insurance claims should be classified on the basis of the nature of the loss (or each component loss, if an entity receives a lump-sum settlement). |
- | Issue 5 — Proceeds from the settlement of corporate-owned life insurance (“COLI”) policies, including bank-owned life insurance (“BOLI”) policies — Cash payments received from the settlement of COLI or BOLI policies should be classified as cash inflows from investing activities. Cash payments for premiums on COLI or BOLI policies may be classified as cash outflows for investing, operating, or a combination of investing and operating activities. |
- | Issue 6 — Distributions received from equity method investments — The guidance provides an accounting policy election for classifying distributions received from equity method investments. Such amounts can be classified using a 1) cumulative earnings approach, or 2) nature of distribution (or “look-through”) approach. |
- | Issue 7 — Beneficial interests in securitization transactions — A transferor’s beneficial interest obtained in a securitization of financial assets should be disclosed as a noncash activity. Cash receipts from a transferor’s beneficial interests in securitized trade receivables should be classified as cash inflows from investing activities. |
- | Issue 8 — Separately identifiable cash flows and application of the predominance principle — Entities should use reasonable judgment to separate cash flows. In the absence of specific guidance, an entity should classify each separately identifiable cash source and use on the basis of the nature of the underlying cash flows. For cash flows with aspects of more than one class that cannot be separated, the classification should be based on the activity that is likely to be the predominant source or use of cash flow. |
Adjusted Purchase Price | |||||||
---|---|---|---|---|---|---|---|
Purchase price | $ | 3,391.6 | |||||
Recognized amounts of identifiable assets acquired and (liabilities assumed), at fair value | |||||||
Cash and interest bearing deposits | $ | 4,411.6 | |||||
Investment securities | 1,297.3 | ||||||
Assets held for sale | 20.4 | ||||||
Loans HFI | 13,571.0 | ||||||
Indemnification assets | 455.4 | ||||||
Other assets | 722.4 | ||||||
Assets of discontinued operation | 524.4 | ||||||
Deposits | (14,533.3 | ) | |||||
Borrowings | (2,970.3 | ) | |||||
Other liabilities | (206.1 | ) | |||||
Liabilities of discontinued operation | (708.4 | ) | |||||
Total fair value of identifiable net assets | $ | 2,584.4 | |||||
Intangible assets | $ | 164.7 | |||||
Goodwill* | $ | 642.5 |
* | See Note 26 — Goodwill and Intangible Assets for discussion on goodwill impairment. |
Years Ended December 31, | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2015 | 2014 | ||||||||||
Net finance revenue | $ | 3,131.4 | $ | 3,247.4 | |||||||
Net income | 636.1 | 1,708.2 |
December 31, 2016 | December 31, 2015 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Total cash and deposits, of which $535.5 million and $498.2 million at December 31, 2016 and 2015, respectively, is restricted | $ | 759.0 | $ | 649.1 | ||||||
Net finance receivables | 1,047.7 | 1,136.6 | ||||||||
Operating lease equipment, net | 9,677.6 | 9,799.9 | ||||||||
Goodwill | 126.8 | 135.1 | ||||||||
Other assets(1) | 1,161.5 | 838.4 | ||||||||
Assets of discontinued operations | $ | 12,772.6 | $ | 12,559.1 | ||||||
Secured borrowings | $ | 1,204.6 | $ | 2,091.6 | ||||||
Other liabilities(2) | 1,597.3 | 1,514.2 | ||||||||
Liabilities of discontinued operations | $ | 2,801.9 | $ | 3,605.8 |
(1) | Amount includes Deposits on commercial aerospace equipment of $1,013.7 million and $696.0 million at December 31, 2016 and December 31, 2015, respectively. |
(2) | Amount includes commercial aerospace maintenance reserves of $1,084.9 million and security deposits of $167.0 million at December 31, 2016, and commercial aerospace maintenance reserves of $980.1 million and security deposits of $155.1 million at December 31, 2015. |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Interest income | $ | 72.8 | $ | 70.2 | $ | 75.2 | |||||||||
Interest expense | (369.3 | ) | (366.5 | ) | (356.7 | ) | |||||||||
(Provision) recovery for credit losses | (15.6 | ) | (1.8 | ) | 4.2 | ||||||||||
Rental income on operating leases | 1,236.8 | 1,134.4 | 1,143.3 | ||||||||||||
Other income(1) | 22.5 | 56.5 | 22.7 | ||||||||||||
Depreciation on operating lease equipment(2) | (345.6 | ) | (411.4 | ) | (385.8 | ) | |||||||||
Maintenance and other operating lease expenses | (32.1 | ) | (45.8 | ) | (25.1 | ) | |||||||||
Operating expenses(3) | (101.9 | ) | (68.2 | ) | (59.3 | ) | |||||||||
Loss on debt extinguishment | (8.3 | ) | (1.1 | ) | – | ||||||||||
Income from discontinued operation before provision for income taxes | 459.3 | 366.3 | 418.5 | ||||||||||||
Provision for income taxes(4) | (914.6 | ) | (45.9 | ) | (27.6 | ) | |||||||||
(Loss) income from discontinued operations, net of taxes | $ | (455.3 | ) | $ | 320.4 | $ | 390.9 |
(1) | Other income includes impairment charges on assets transferred to AHFS for $32 million, $4 million and $19 million for the years ended December 31, 2016, 2015 and 2014, respectively. |
(2) | Depreciation on operating lease equipment is suspended when an operating lease asset is placed in Assets Held for Sale. Pre-tax income for 2016 benefited from $106 million of suspended depreciation related to operating lease equipment to be sold to Avolon as described above. |
(3) | Operating expenses in 2016 include costs related to the commercial air separation initiative of $34 million. Operating expense includes salaries and benefits of $47 million, $49 million and $45 million for the years ended December 31, 2016, 2015 and 2014, respectively. |
(4) | Provision for income taxes for the year ended December 31, 2016 includes $847 million net tax expense related to the Company’s decision to no longer assert that it would indefinitely reinvest the unremitted earning of Commercial Air. For the years ended December 31, 2016, 2015, and 2014, the Company’s tax rate for discontinued operations was 199%, 12% and 7%, respectively. |
Years Ended December 31, | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | ||||||||||
Net cash flows provided by operations | $ | 35.7 | $ | 942.1 | $ | 1,009.8 | ||||||
Net cash flows used in investing activities | (655.9 | ) | (749.6 | ) | (1,812.8 | ) |
December 31, 2016 | December 31, 2015 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Total cash and deposits, all of which is restricted | $ | 5.8 | $ | 1.5 | ||||||
Net Finance Receivables(1) | 374.0 | 449.5 | ||||||||
Other assets(2) | 68.3 | 49.5 | ||||||||
Assets of discontinued operation | $ | 448.1 | $ | 500.5 | ||||||
Secured borrowings(1) | $ | 366.4 | $ | 440.6 | ||||||
Other liabilities(3) | 569.4 | 255.6 | ||||||||
Liabilities of discontinued operation | $ | 935.8 | $ | 696.2 |
(1) | Net finance receivables include $365.5 million and $440.2 million of securitized balances at December 31, 2016 and December 31, 2015, respectively, and $8.5 million and $9.3 million of additional draws awaiting securitization respectively. Secured borrowings relate to those receivables. |
(2) | Amount includes servicing advances, servicer receivables and property and equipment, net of accumulated depreciation. |
(3) | Other liabilities include contingent liabilities, reverse mortgage servicing liabilities and other accrued liabilities. |
Years Ended December 31, | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | ||||||||||
Interest income(1) | $ | 11.6 | $ | 4.3 | |||||||
Interest expense(1) | (10.7 | ) | (4.4 | ) | |||||||
Other income (loss)(2) | 15.4 | 16.7 | |||||||||
Operating expenses(3) | (330.1 | ) | (33.7 | ) | |||||||
Loss from discontinued operation before benefit for income taxes | (313.8 | ) | (17.1 | ) | |||||||
Benefit for income taxes(4) | 103.7 | 6.7 | |||||||||
Loss from discontinued operation, net of taxes | $ | (210.1 | ) | $ | (10.4 | ) |
(1) | Includes amortization for the premium associated with the HECM loans and related secured borrowings. |
(2) | For the year ended December 31, 2016, other income (loss) includes a $19 million impairment charge to the servicing liability related to our reverse mortgage servicing operations. |
(3) | For the year ended December 31, 2016, operating expense is comprised of approximately $16 million in salaries and benefits, $27 million in professional and legal services, and $22 million for other expenses such as data processing, premises and equipment, and miscellaneous charges. In addition, operating expenses for the year ended December 31, 2016 includes a servicing-related reserve of approximately $260 million, which is net of a corresponding increase in the indemnification receivable from the FDIC. For the year ended December 31, 2015, operating expense is comprised of approximately $11 million in salaries and benefits, $6 million in professional services and $16 million for other expenses such as data processing, premises and equipment, legal settlement, and miscellaneous charges. |
(4) | For the years ended December 31, 2016 and 2015, the Company’s tax rate for discontinued operations is 33% and 39%, respectively. |
Years Ended December 31, | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | ||||||||||
Net cash flows (used in) provided by operations | $ | (40.0 | ) | $ | 18.5 | ||||||
Net cash flows provided by investing activities | 88.5 | 27.9 |
Year Ended December 31, 2014 | ||||||
---|---|---|---|---|---|---|
Interest income | $ | 27.0 | ||||
Interest expense | (248.2 | ) | ||||
Other income | (2.1 | ) | ||||
Operating expenses | (3.6 | ) | ||||
Loss from discontinued operation before provision for income taxes | (226.9 | ) | ||||
Provision for income taxes | (3.4 | ) | ||||
Loss from discontinued operation, net of taxes | (230.3 | ) | ||||
Gain on sale of discontinued operations, net of taxes | 282.8 | |||||
Income from discontinued operation, net of taxes | $ | 52.5 |
Year Ended December 31, 2014 | |||||||
---|---|---|---|---|---|---|---|
Net cash flows used in operations | $ | (1,155.9 | ) | ||||
Net cash flows provided by investing activities | 1,141.4 |
December 31, 2016 | December 31, 2015 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Total cash and deposits | $ | 764.8 | $ | 650.6 | ||||||
Net Finance Receivables | 1,421.7 | 1,586.1 | ||||||||
Operating lease equipment, net | 9,677.6 | 9,799.9 | ||||||||
Goodwill | 126.8 | 135.1 | ||||||||
Other assets | 1,229.8 | 887.9 | ||||||||
Assets of discontinued operations | $ | 13,220.7 | $ | 13,059.6 | ||||||
Secured borrowings | $ | 1,571.0 | $ | 2,532.2 | ||||||
Other liabilities | 2,166.7 | 1,769.8 | ||||||||
Liabilities of discontinued operations | $ | 3,737.7 | $ | 4,302.0 |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Interest income | $ | 84.4 | $ | 74.5 | $ | 102.2 | |||||||||
Interest expense | (380.0 | ) | (370.9 | ) | (604.9 | ) | |||||||||
(Provision) recovery for credit losses | (15.6 | ) | (1.8 | ) | 4.2 | ||||||||||
Rental income on operating leases | 1,236.8 | 1,134.4 | 1,143.3 | ||||||||||||
Other income (loss) | 37.9 | 73.2 | 20.6 | ||||||||||||
Depreciation on operating lease equipment | (345.6 | ) | (411.4 | ) | (385.8 | ) | |||||||||
Maintenance and other operating lease expenses | (32.1 | ) | (45.8 | ) | (25.1 | ) | |||||||||
Operating expenses | (432.0 | ) | (101.9 | ) | (62.9 | ) | |||||||||
Loss on debt extinguishment | (8.3 | ) | (1.1 | ) | – | ||||||||||
Income from discontinued operation before provision for income taxes | 145.5 | 349.2 | 191.6 | ||||||||||||
Provision for income taxes | (810.9 | ) | (39.2 | ) | (31.0 | ) | |||||||||
(Loss) income from discontinued operations, net of taxes | (665.4 | ) | 310.0 | 160.6 | |||||||||||
Gain on sale of discontinued operations, net of taxes | – | – | 282.8 | ||||||||||||
(Loss) income from discontinued operation, net of taxes | $ | (665.4 | ) | $ | 310.0 | $ | 443.4 |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Net cash flows (used in) provided by operations | $ | (4.3) | $ | 960.6 | $ | (146.1) | |||||||||
Net cash flows used in investing activities | (567.4) | (721.7) | (671.4) |
December 31, 2016 | December 31, 2015 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Commercial Loans | $ | 20,117.8 | $ | 20,739.4 | ||||||
Direct financing leases and leveraged leases | 2,852.9 | 2,919.1 | ||||||||
Total commercial | 22,970.7 | 23,658.5 | ||||||||
Consumer Loans | 6,565.2 | 6,860.2 | ||||||||
Total finance receivables | 29,535.9 | 30,518.7 | ||||||||
Finance receivables held for sale | 635.8 | 1,985.1 | ||||||||
Finance receivables and held for sale receivables(1) | $ | 30,171.7 | $ | 32,503.8 |
(1) | Assets held for sale on the Balance Sheet as of December 31, 2016 includes finance receivables and operating lease equipment primarily related to portfolios in Commercial Banking and the China portfolio in NSP. December 31, 2015 included finance receivables and operating lease equipment in Canada, China and the U.K. As discussed in subsequent tables, since the Company manages the credit risk and collections of finance receivables held for sale consistently with its finance receivables held for investment, the aggregate amount is presented in this table. |
December 31, 2016 | December 31, 2015 | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Domestic | Foreign | Total | Domestic | Foreign | Total | ||||||||||||||||||||||
Commercial Banking | $ | 20,440.7 | $ | 2,121.6 | $ | 22,562.3 | $ | 20,999.6 | $ | 2,332.8 | $ | 23,332.4 | |||||||||||||||
Consumer Banking | 6,973.6 | – | 6,973.6 | 7,186.3 | – | 7,186.3 | |||||||||||||||||||||
Total | $ | 27,414.3 | $ | 2,121.6 | $ | 29,535.9 | $ | 28,185.9 | $ | 2,332.8 | $ | 30,518.7 |
December 31, 2016 | December 31, 2015 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Unearned income | $ | (727.1 | ) | $ | (711.6 | ) | ||||
Equipment residual values | 583.4 | 581.7 | ||||||||
Unamortized premiums / (discounts) | (31.0 | ) | (34.0 | ) | ||||||
Accretable yield on PCI loans | 1,261.4 | 1,299.1 | ||||||||
Net unamortized deferred costs and (fees)(1) | 55.8 | 42.9 | ||||||||
Leveraged lease third party non-recourse debt payable | (109.7 | ) | (119.2 | ) |
(1) | Balance relates to the Commercial Banking segment. |
- | Pass — finance receivables in this category do not meet the criteria for classification in one of the categories below. |
- | Special mention — a special mention asset exhibits potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects. |
- | Classified — a classified asset ranges from: (1) assets that exhibit a well-defined weakness and are inadequately protected by the current sound worth and paying capacity of the borrower, and are characterized by the distinct possibility that some loss will be sustained if the deficiencies are not corrected to (2) assets with weaknesses that make collection or liquidation in full unlikely on the basis of current facts, conditions, and values. Assets in this classification can be accruing or on non-accrual depending on the evaluation of these factors. |
Grade: | Pass | Special Mention | Classified- accruing | Classified- non-accrual | PCI Loans | Total | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2016 | |||||||||||||||||||||||||||
Commercial Banking | |||||||||||||||||||||||||||
Commercial Finance | $ | 8,184.7 | $ | 677.6 | $ | 1,181.7 | $ | 188.8 | $ | 42.7 | $ | 10,275.5 | |||||||||||||||
Real Estate Finance | 5,191.4 | 168.7 | 115.6 | 20.4 | 70.5 | 5,566.6 | |||||||||||||||||||||
Business Capital | 6,238.7 | 422.0 | 271.7 | 41.7 | – | 6,974.1 | |||||||||||||||||||||
Rail | 88.7 | 14.1 | 0.9 | – | – | 103.7 | |||||||||||||||||||||
Total Commercial Banking | 19,703.5 | 1,282.4 | 1,569.9 | 250.9 | 113.2 | 22,919.9 | |||||||||||||||||||||
Consumer Banking | |||||||||||||||||||||||||||
Other Consumer Banking | 374.9 | 8.3 | 22.4 | – | 2.8 | 408.4 | |||||||||||||||||||||
Total Consumer Banking | 374.9 | 8.3 | 22.4 | – | 2.8 | $ | 408.4 | ||||||||||||||||||||
Non-Strategic Portfolios | 143.7 | 36.9 | 19.1 | 10.3 | – | 210.0 | |||||||||||||||||||||
Total | 20,222.1 | 1,327.6 | 1,611.4 | 261.2 | 116.0 | 23,538.3 | |||||||||||||||||||||
December 31, 2015 | |||||||||||||||||||||||||||
Commercial Banking | |||||||||||||||||||||||||||
Commercial Finance | $ | 10,138.0 | $ | 790.6 | $ | 593.5 | $ | 131.5 | $ | 69.4 | $ | 11,723.0 | |||||||||||||||
Real Estate Finance | 5,154.9 | 97.6 | 18.5 | 3.6 | 93.9 | 5,368.5 | |||||||||||||||||||||
Business Capital | 5,648.8 | 517.0 | 320.1 | 56.0 | – | 6,541.9 | |||||||||||||||||||||
Rail | 119.0 | 1.4 | 0.6 | – | – | 121.0 | |||||||||||||||||||||
Total Commercial Banking | 21,060.7 | 1,406.6 | 932.7 | 191.1 | 163.3 | 23,754.4 | |||||||||||||||||||||
Consumer Banking | |||||||||||||||||||||||||||
Other Consumer Banking | 292.2 | 11.5 | 17.2 | – | 5.3 | 326.2 | |||||||||||||||||||||
Total Consumer Banking | 292.2 | 11.5 | 17.2 | – | 5.3 | 326.2 | |||||||||||||||||||||
Non- Strategic Portfolios | 1,286.6 | 115.4 | 60.0 | 56.0 | – | 1,518.0 | |||||||||||||||||||||
Total | $ | 22,639.5 | $ | 1,533.5 | $ | 1,009.9 | $ | 247.1 | $ | 168.6 | $ | 25,598.6 |
Single Family Residential | Reverse Mortgage | ||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Covered Loans | Non-covered Loans | Non-covered loans | |||||||||||||||||||||||||||||||||||||||||
Non-PCI | PCI | Non-PCI | PCI | Total Single Family Residential | Covered Loans Non-PCI | Non-PCI | PCI | Total Reverse Mortgages | Total Consumer Loans | ||||||||||||||||||||||||||||||||||
December 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||
Greater than 125% | $ | 2.2 | $ | 261.4 | $ | 12.3 | $ | – | $ | 275.9 | $ | 0.6 | $ | 8.8 | $ | 33.8 | $ | 43.2 | $ | 319.1 | |||||||||||||||||||||||
101% – 125% | 4.7 | 443.7 | 13.6 | – | 462.0 | 1.2 | 12.7 | 7.9 | 21.8 | 483.8 | |||||||||||||||||||||||||||||||||
80% – 100% | 226.6 | 588.1 | 40.5 | – | 855.2 | 24.0 | 42.3 | 7.5 | 73.8 | 929.0 | |||||||||||||||||||||||||||||||||
Less than 80% | 1,515.6 | 872.4 | 1,713.1 | 9.2 | 4,110.3 | 405.4 | 304.9 | 9.8 | 720.1 | 4,830.4 | |||||||||||||||||||||||||||||||||
Not Applicable(1) | – | – | 2.9 | – | 2.9 | – | – | – | – | 2.9 | |||||||||||||||||||||||||||||||||
Total | $ | 1,749.1 | $ | 2,165.6 | $ | 1,782.4 | $ | 9.2 | $ | 5,706.3 | $ | 431.2 | $ | 368.7 | $ | 59.0 | $ | 858.9 | $ | 6,565.2 | |||||||||||||||||||||||
December 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||
Greater than 125% | $ | 1.1 | $ | 394.6 | $ | 0.8 | $ | 15.7 | $ | 412.2 | $ | 1.0 | $ | 3.9 | $ | 39.3 | $ | 44.2 | $ | 456.4 | |||||||||||||||||||||||
101% – 125% | 3.6 | 619.2 | 0.2 | 14.8 | 637.8 | 2.5 | 6.5 | 17.0 | 26.0 | 663.8 | |||||||||||||||||||||||||||||||||
80% – 100% | 449.3 | 551.4 | 14.3 | 11.4 | 1,026.4 | 26.5 | 37.5 | 7.0 | 71.0 | 1,097.4 | |||||||||||||||||||||||||||||||||
Less than 80% | 1,621.0 | 828.6 | 1,416.1 | 12.9 | 3,878.6 | 432.6 | 312.5 | 11.1 | 756.2 | 4,634.8 | |||||||||||||||||||||||||||||||||
Not Applicable(1) | – | – | 7.8 | – | 7.8 | – | – | – | – | 7.8 | |||||||||||||||||||||||||||||||||
Total | $ | 2,075.0 | $ | 2,393.8 | $ | 1,439.2 | $ | 54.8 | $ | 5,962.8 | $ | 462.6 | $ | 360.4 | $ | 74.4 | $ | 897.4 | $ | 6,860.2 |
(1) | Certain Consumer Loans do not have LTV’s, including the Credit Card portfolio. |
Balance at December 31, 2016 | PCI | Non-PCI | Total | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Loans HFI | ||||||||||||||
LCM | $ | 2,165.6 | $ | 2,180.3 | $ | 4,345.9 | ||||||||
Loans HFI | 2,165.6 | 2,180.3 | 4,345.9 | |||||||||||
Consumer Banking loans HFI at carrying value | $ | 2,165.6 | $ | 2,180.3 | $ | 4,345.9 |
Balance at December 31, 2015 | PCI | Non-PCI | Total | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Loans HFI | ||||||||||||||
LCM | $ | 2,393.8 | $ | 2,537.6 | $ | 4,931.4 | ||||||||
Loans HFI | 2,393.8 | 2,537.6 | 4,931.4 | |||||||||||
Consumer Banking loans HFI at carrying value | $ | 2,393.8 | $ | 2,537.6 | $ | 4,931.4 |
Past Due | |||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
30 – 59 Days Past Due | 60 – 89 Days Past Due | 90 Days or Greater | Total Past Due | Current(1) | PCI Loans(2) | Total | |||||||||||||||||||||||||
December 31, 2016 | |||||||||||||||||||||||||||||||
Commercial Banking | |||||||||||||||||||||||||||||||
Commercial Finance | $ | 21.4 | $ | – | $ | 17.6 | $ | 39.0 | $ | 10,193.8 | $ | 42.7 | $ | 10,275.5 | |||||||||||||||||
Real Estate Finance | 0.1 | – | – | 0.1 | 5,496.0 | 70.5 | 5,566.6 | ||||||||||||||||||||||||
Business Capital | 143.6 | 42.4 | 16.3 | 202.3 | 6,771.8 | – | 6,974.1 | ||||||||||||||||||||||||
Rail | 5.9 | 0.6 | 2.3 | 8.8 | 94.9 | – | 103.7 | ||||||||||||||||||||||||
Total Commercial Banking | 171.0 | 43.0 | 36.2 | 250.2 | 22,556.5 | 113.2 | 22,919.9 | ||||||||||||||||||||||||
Consumer Banking | |||||||||||||||||||||||||||||||
Legacy Consumer Mortgages | 22.6 | 6.1 | 36.6 | 65.3 | 2,563.6 | 2,233.8 | 4,862.7 | ||||||||||||||||||||||||
Other Consumer Banking | 7.4 | 4.9 | 0.6 | 12.9 | 2,163.4 | 2.8 | 2,179.1 | ||||||||||||||||||||||||
Total Consumer Banking | 30.0 | 11.0 | 37.2 | 78.2 | 4,727.0 | 2,236.6 | 7,041.8 | ||||||||||||||||||||||||
Non-Strategic Portfolios | 3.0 | 1.1 | 7.0 | 11.1 | 198.9 | – | 210.0 | ||||||||||||||||||||||||
Total | $ | 204.0 | $ | 55.1 | $ | 80.4 | $ | 339.5 | $ | 27,482.4 | $ | 2,349.8 | $ | 30,171.7 | |||||||||||||||||
December 31, 2015 | |||||||||||||||||||||||||||||||
Commercial Banking | |||||||||||||||||||||||||||||||
Commercial Finance | $ | – | $ | – | $ | 20.5 | $ | 20.5 | $ | 11,633.1 | $ | 69.4 | $ | 11,723.0 | |||||||||||||||||
Real Estate Finance | 1.9 | – | 0.7 | 2.6 | 5,272.0 | 93.9 | 5,368.5 | ||||||||||||||||||||||||
Business Capital | 131.0 | 32.7 | 26.8 | 190.5 | 6,351.4 | – | 6,541.9 | ||||||||||||||||||||||||
Rail | 8.4 | 2.0 | 2.1 | 12.5 | 108.5 | – | 121.0 | ||||||||||||||||||||||||
Total Commercial Banking | 141.3 | 34.7 | 50.1 | 226.1 | 23,365.0 | 163.3 | 23,754.4 | ||||||||||||||||||||||||
Consumer Banking | |||||||||||||||||||||||||||||||
Legacy Consumer Mortgages | 15.8 | 1.7 | 4.1 | 21.6 | 2,923.7 | 2,523.1 | 5,468.4 | ||||||||||||||||||||||||
Other Consumer Banking | 2.7 | 0.3 | 0.4 | 3.4 | 1,754.3 | 5.3 | 1,763.0 | ||||||||||||||||||||||||
Total Consumer Banking | 18.5 | 2.0 | 4.5 | 25.0 | 4,678.0 | 2,528.4 | 7,231.4 | ||||||||||||||||||||||||
Non-Strategic Portfolios | 18.8 | 22.1 | 33.7 | 74.6 | 1,443.4 | – | 1,518.0 | ||||||||||||||||||||||||
Total | $ | 178.6 | $ | 58.8 | $ | 88.3 | $ | 325.7 | $ | 29,486.4 | $ | 2,691.7 | $ | 32,503.8 |
(1) | Due to their nature, reverse mortgage loans are included in Current, as they do not have contractual payments due at a specified time. |
(2) | PCI loans are written down at acquisition to their fair value using an estimate of cash flows deemed to be collectible. Accordingly, such loans are no longer classified as past due or non-accrual even though they may be contractually past due as we expect to fully collect the new carrying values of these loans. |
December 31, 2016 | December 31, 2015 | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Held for Investment | Held for Sale | Total | Held for Investment | Held for Sale | Total | ||||||||||||||||||||||
Commercial Banking | |||||||||||||||||||||||||||
Commercial Finance | $ | 156.7 | $ | 32.1 | $ | 188.8 | $ | 120.5 | $ | 11.0 | $ | 131.5 | |||||||||||||||
Real Estate Finance | 20.4 | – | 20.4 | 3.6 | – | 3.6 | |||||||||||||||||||||
Business Capital | 41.7 | – | 41.7 | 56.0 | – | 56.0 | |||||||||||||||||||||
Total Commercial Banking | 218.8 | 32.1 | 250.9 | 180.1 | 11.0 | 191.1 | |||||||||||||||||||||
Consumer Banking | |||||||||||||||||||||||||||
Legacy Consumer Mortgages | 17.3 | – | 17.3 | 4.2 | 0.6 | 4.8 | |||||||||||||||||||||
Other Consumer Banking | 0.1 | – | 0.1 | – | 0.4 | 0.4 | |||||||||||||||||||||
Total Consumer Banking | 17.4 | – | 17.4 | 4.2 | 1.0 | 5.2 | |||||||||||||||||||||
Non-Strategic Portfolios | – | 10.3 | 10.3 | – | 56.0 | 56.0 | |||||||||||||||||||||
Total | $ | 236.2 | $ | 42.4 | $ | 278.6 | $ | 184.3 | $ | 68.0 | $ | 252.3 | |||||||||||||||
Repossessed assets and OREO | 72.7 | 123.5 | |||||||||||||||||||||||||
Total non-performing assets | $ | 351.3 | $ | 375.8 | |||||||||||||||||||||||
Commercial loans past due 90 days or more accruing | $ | 7.2 | $ | 15.6 | |||||||||||||||||||||||
Consumer loans past due 90 days or more accruing | 24.8 | 0.2 | |||||||||||||||||||||||||
Total Accruing loans past due 90 days or more | $ | 32.0 | $ | 15.8 |
(dollars in millions) | December 31, 2016 | December 31, 2015 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
PCI | $ | 201.7 | $ | 317.9 | ||||||
Non-PCI | 106.3 | 71.0 | ||||||||
Loans in process of foreclosure | $ | 308.0 | $ | 388.9 | ||||||
OREO | $ | 69.9 | $ | 118.0 |
Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment(3) | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2016 | |||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||
Commercial Banking | |||||||||||||||||||
Commercial Finance | $ | 54.3 | $ | 72.2 | $ | – | $ | 29.5 | |||||||||||
Business Capital | 0.5 | 1.8 | – | 5.1 | |||||||||||||||
Real Estate Finance | 0.7 | 0.7 | – | 1.3 | |||||||||||||||
With an allowance recorded: | |||||||||||||||||||
Commercial Banking | |||||||||||||||||||
Commercial Finance | 143.0 | 146.2 | 25.5 | 132.1 | |||||||||||||||
Business Capital | 6.6 | 6.6 | 4.2 | 8.2 | |||||||||||||||
Real Estate Finance | 16.7 | 16.8 | 4.0 | 5.2 | |||||||||||||||
Total Impaired Loans(1) | 221.8 | 244.3 | 33.7 | 181.4 | |||||||||||||||
Total Loans Impaired at Acquisition Date(2) | 2,349.8 | 3,440.7 | 13.6 | 2,504.4 | |||||||||||||||
Total | $ | 2,571.6 | $ | 3,685.0 | $ | 47.3 | $ | 2,685.8 | |||||||||||
December 31, 2015 | |||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||
Commercial Banking | |||||||||||||||||||
Commercial Finance | $ | 15.4 | $ | 22.8 | $ | – | $ | 6.5 | |||||||||||
Business Capital | 6.4 | 9.7 | – | 5.9 | |||||||||||||||
Real Estate Finance | 0.2 | 0.8 | – | 0.7 | |||||||||||||||
Non-Strategic Portfolios | – | – | – | 7.3 | |||||||||||||||
With an allowance recorded: | |||||||||||||||||||
Commercial Banking | |||||||||||||||||||
Commercial Finance | 102.5 | 112.1 | 22.7 | 53.2 | |||||||||||||||
Business Capital | 9.7 | 11.8 | 4.7 | 5.4 | |||||||||||||||
Non-Strategic Portfolios | – | – | – | 7.3 | |||||||||||||||
Total Impaired Loans(1) | 134.2 | 157.2 | 27.4 | 86.3 | |||||||||||||||
Total Loans Impaired at Acquisition Date(2) | 2,691.7 | 3,976.7 | 4.9 | 1,107.4 | |||||||||||||||
Total | $ | 2,825.9 | $ | 4,133.9 | $ | 32.3 | $ | 1,193.7 |
(1) | Interest income recorded for the years ended December 31, 2016 and December 31, 2015 while the loans were impaired were $1.6 million and $1.5 million, of which $0.6 million and $0.5 million was interest recognized using cash-basis method of accounting for each year, respectively. |
(2) | Details of finance receivables that were identified as impaired at the Acquisition Date are presented under Loans Acquired with Deteriorated Credit Quality. |
(3) | Average recorded investment for the year ended December 31, 2016 and year ended December 31, 2015. |
- | Instances where the primary source of payment is no longer sufficient to repay the loan in accordance with terms of the loan document; |
- | Lack of current financial data related to the borrower or guarantor; |
- | Delinquency status of the loan; |
- | Borrowers experiencing problems, such as operating losses, marginal working capital, inadequate cash flow, excessive financial leverage or business interruptions; |
- | Loans secured by collateral that is not readily marketable or that has experienced or is susceptible to deterioration in realizable value; and |
- | Loans to borrowers in industries or countries experiencing severe economic instability. |
- | “Orderly liquidation value” is the basis for collateral valuation; |
- | Appraisals are updated annually or more often as market conditions warrant; and |
- | Appraisal values are discounted in the determination of impairment if the: |
- | appraisal does not reflect current market conditions; or |
- | collateral consists of inventory, accounts receivable, or other forms of collateral that may become difficult to locate, or collect or may be subject to pilferage in a liquidation. |
December 31, 2016 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Unpaid Principal Balance | Carrying Value | Allowance for Loan Losses | |||||||||||||
Commercial Banking | |||||||||||||||
Commercial Finance | $ | 70.0 | $ | 42.7 | $ | 2.4 | |||||||||
Real Estate Finance | 108.1 | 70.5 | 4.9 | ||||||||||||
Consumer Banking | |||||||||||||||
Other Consumer Banking | 3.7 | 2.8 | – | ||||||||||||
Legacy Consumer Mortgages | 3,258.9 | 2,233.8 | 6.3 | ||||||||||||
$ | 3,440.7 | $ | 2,349.8 | $ | 13.6 |
December 31, 2015 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Unpaid Principal Balance | Carrying Value | Allowance for Loan Losses | |||||||||||||
Commercial Banking | |||||||||||||||
Commercial Finance | $ | 115.5 | $ | 69.4 | $ | 2.5 | |||||||||
Real Estate Finance | 160.4 | 93.9 | 0.6 | ||||||||||||
Consumer Banking | |||||||||||||||
Other Consumer Banking | 6.8 | 5.3 | – | ||||||||||||
Legacy Consumer Mortgages | 3,694.0 | 2,523.1 | 1.8 | ||||||||||||
$ | 3,976.7 | $ | 2,691.7 | $ | 4.9 |
December 31, 2016 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(dollars in millions) | Non-criticized | Criticized | Total | ||||||||||||
Commercial Finance | $ | 5.4 | $ | 37.3 | $ | 42.7 | |||||||||
Real Estate Finance | 35.6 | 34.9 | 70.5 | ||||||||||||
Total | $ | 41.0 | $ | 72.2 | $ | 113.2 |
December 31, 2015 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(dollars in millions) | Non-criticized | Criticized | Total | ||||||||||||
Commercial Finance | $ | 5.3 | $ | 64.1 | $ | 69.4 | |||||||||
Real Estate Finance | 33.0 | 60.9 | 93.9 | ||||||||||||
Total | $ | 38.3 | $ | 125.0 | $ | 163.3 |
(dollars in millions) | Year ended December 31, 2015 | ||||||
---|---|---|---|---|---|---|---|
Balance at August 3, 2015 | $ | 1,254.8 | |||||
Accretion into interest income | (76.2 | ) | |||||
Reclassification from non-accretable difference | 133.2 | ||||||
Disposals and Other | (12.7 | ) | |||||
Balance at December 31, 2015 | $ | 1,299.1 |
Year ended December 31, 2016 | |||||||
---|---|---|---|---|---|---|---|
Balance at December 31, 2015 | $ | 1,299.1 | |||||
Accretion into interest income | (208.3 | ) | |||||
Reclassification from non-accretable difference | 213.7 | ||||||
Disposals and Other | (43.1 | ) | |||||
Balance at December 31, 2016 | $ | 1,261.4 |
- | Borrower is in default with CIT or other material creditor |
- | Borrower has declared bankruptcy |
- | Growing doubt about the borrower’s ability to continue as a going concern |
- | Borrower has (or is expected to have) insufficient cash flow to service debt |
- | Borrower is de-listing securities |
- | Borrower’s inability to obtain funds from other sources |
- | Breach of financial covenants by the borrower. |
- | Assets used to satisfy debt are less than CIT’s recorded investment in the receivable |
- | Modification of terms — interest rate changed to below market rate |
- | Maturity date extension at an interest rate less than market rate |
- | The borrower does not otherwise have access to funding for debt with similar risk characteristics in the market at the restructured rate and terms |
- | Capitalization of interest |
- | Increase in interest reserves |
- | Conversion of credit to Payment-In-Kind (PIK) |
- | Delaying principal and/or interest for a period of three months or more |
- | Partial forgiveness of the balance. |
- | The nature of modifications qualifying as TDR’s based upon recorded investment at December 31, 2016 was comprised of payment deferrals for 12% and covenant relief and/or other for 88%. For December 31, 2015 TDR recorded investment was comprised of payment deferrals for 74% and covenant relief and/or other for 26%. |
- | Payment deferrals result in lower net present value of cash flows, if not accompanied by additional interest or fees, and increased provision for credit losses to the extent applicable. The financial impact of these modifications is not significant given the moderate length of deferral periods; |
- | Interest rate reductions result in lower amounts of interest being charged to the customer, but are a relatively small part of the Company’s restructuring programs. Additionally, in some instances, modifications improve the Company’s economic return through increased interest rates and fees, but are reported as TDRs due to assessments regarding the borrowers’ ability to independently obtain similar funding in the market and assessments of the relationship between modified rates and terms and comparable market rates and terms. The weighted average change in interest rates for all TDRs occurring during the quarters ended December 31, 2016 and 2015 was not significant; |
- | Debt forgiveness, or the reduction in amount owed by borrower, results in incremental provision for credit losses, in the form of higher charge-offs. While these types of modifications have the greatest individual impact on the allowance, the amounts of principal forgiveness for TDRs occurring during the years ended December 31, 2016 and 2015 was not significant, as debt forgiveness is a relatively small component of the Company’s modification programs; and |
- | The other elements of the Company’s modification programs that are not TDRs, do not have a significant impact on financial results given their relative size, or do not have a direct financial impact, as in the case of covenant changes. |
- | Mobility rates — We used the actuarial estimates of contract termination using the Society of Actuaries mortality tables, adjusted for expected prepayments and relocations. |
- | Home Price Appreciation — Consistent with other projections from various market sources, we use the Moody’s baseline forecast at a regional level to estimate home price appreciation on a loan-level basis. |
Year Ending: | ||||||
---|---|---|---|---|---|---|
2017 | $ | 13.5 | ||||
2018 | 11.2 | |||||
2019 | 9.3 | |||||
2020 | 7.6 | |||||
2021 | 6.2 | |||||
2022 – 2026 | 17.0 | |||||
2027 – 2031 | 5.2 | |||||
2032 – 2036 | 1.3 | |||||
Thereafter | 0.3 | |||||
Total(1)(2) | $ | 71.6 |
(1) | This table does not take into consideration cash inflows including payments from mortgagors or payoffs based on contractual terms. |
(2) | This table includes the reverse mortgages supported by the Company as a result of the IndyMac loss-share agreements with the FDIC. As of December 31, 2016, the Company is responsible for funding up to a remaining $54.8 million of the total amount. Refer to the Indemnification Asset footnote for more information on this agreement and the Company’s responsibilities toward this reverse mortgage portfolio. |
Commercial Banking | Consumer Banking | Non-Strategic Portfolios | Corporate and Other | Total | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year Ended December 31, 2016 | ||||||||||||||||||||||
Balance – December 31, 2015 | $ | 336.8 | $ | 10.2 | $ | – | $ | – | $ | 347.0 | ||||||||||||
Provision for credit losses | 183.1 | 11.7 | (0.1 | ) | – | 194.7 | ||||||||||||||||
Other(1) | 0.2 | 2.0 | – | – | 2.2 | |||||||||||||||||
Gross charge-offs(2) | (133.8 | ) | (2.8 | ) | – | – | (136.6 | ) | ||||||||||||||
Recoveries | 22.1 | 3.1 | 0.1 | – | 25.3 | |||||||||||||||||
Balance – December 31, 2016 | $ | 408.4 | $ | 24.2 | $ | – | $ | – | $ | 432.6 | ||||||||||||
Allowance balance at December 31, 2016 | ||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 33.7 | $ | – | $ | – | $ | – | $ | 33.7 | ||||||||||||
Loans collectively evaluated for impairment | 367.4 | 17.9 | – | – | 385.3 | |||||||||||||||||
Loans acquired with deteriorated credit quality(3) | 7.3 | 6.3 | – | – | 13.6 | |||||||||||||||||
Allowance for loan losses | $ | 408.4 | $ | 24.2 | $ | – | $ | – | $ | 432.6 | ||||||||||||
Other reserves(1) | $ | 43.6 | $ | 0.1 | $ | – | $ | – | $ | 43.7 | ||||||||||||
Finance receivables at December 31, 2016 | ||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 221.8 | $ | – | $ | – | $ | – | $ | 221.8 | ||||||||||||
Loans collectively evaluated for impairment | 22,227.3 | 4,737.0 | – | – | 26,964.3 | |||||||||||||||||
Loans acquired with deteriorated credit quality(3) | 113.2 | 2,236.6 | – | – | 2,349.8 | |||||||||||||||||
Ending balance | $ | 22,562.3 | $ | 6,973.6 | $ | – | $ | – | $ | 29,535.9 | ||||||||||||
Percent of loans to total loans | 76.4 | % | 23.6 | % | – | – | 100 | % | ||||||||||||||
Year Ended December 31, 2015 | ||||||||||||||||||||||
Balance – December 31, 2014 | $ | 296.7 | $ | – | $ | 37.5 | $ | – | $ | 334.2 | ||||||||||||
Provision for credit losses | 143.7 | 8.7 | 6.2 | – | 158.6 | |||||||||||||||||
Other(1) | (8.2 | ) | 1.7 | (2.7 | ) | – | (9.2 | ) | ||||||||||||||
Gross charge-offs(2) | (113.0 | ) | (1.3 | ) | (50.8 | ) | – | (165.1 | ) | |||||||||||||
Recoveries | 17.6 | 1.1 | 9.8 | – | 28.5 | |||||||||||||||||
Balance – December 31, 2015 | $ | 336.8 | $ | 10.2 | $ | – | $ | – | $ | 347.0 | ||||||||||||
Allowance balance at December 31, 2015 | ||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 27.4 | $ | – | $ | – | $ | – | $ | 27.4 | ||||||||||||
Loans collectively evaluated for impairment | 306.2 | 8.4 | – | – | 314.6 | |||||||||||||||||
Loans acquired with deteriorated credit quality(3) | 3.2 | 1.8 | – | – | 5.0 | |||||||||||||||||
Allowance for loan losses | $ | 336.8 | $ | 10.2 | $ | – | $ | – | $ | 347.0 | ||||||||||||
Other reserves(1) | $ | 43.0 | $ | 0.1 | $ | – | $ | – | $ | 43.1 | ||||||||||||
Finance receivables at December 31, 2015 | ||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 134.2 | $ | – | $ | – | $ | – | $ | 134.2 | ||||||||||||
Loans collectively evaluated for impairment | 23,034.9 | 4,657.9 | – | – | 27,692.8 | |||||||||||||||||
Loans acquired with deteriorated credit quality(3) | 163.3 | 2,528.4 | – | – | 2,691.7 | |||||||||||||||||
Ending balance | $ | 23,332.4 | $ | 7,186.3 | $ | – | $ | – | $ | 30,518.7 | ||||||||||||
Percentage of loans to total loans | 76.5 | % | 23.5 | % | – | – | 100 | % |
(1) | “Other reserves” represents credit loss reserves for unfunded lending commitments, letters of credit and for deferred purchase agreements, all of which is recorded in Other liabilities. “Other” also includes allowance for loan losses associated with loan sales and foreign currency translations. |
(2) | Gross charge-offs of amounts specifically reserved in prior periods included $35.8 million and $21.3 million charged directly to the Allowance for loan losses for the years ended December 31, 2016 and December 31, 2015, respectively. The current year charge offs related to Commercial Banking for all periods. The prior year charge offs related to Commercial banking and Non-Strategic Portfolio. |
(3) | Represents loans considered impaired as part of the OneWest transaction and are accounted for under the guidance in ASC 310-30 (Loans and Debt Securities Acquired with Deteriorated Credit Quality). |
Years Ended December 31, | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | ||||||||||
Loan indemnification(1) | $ | 223.0 | $ | 332.9 | |||||||
Reverse mortgage indemnification | 10.4 | 10.3 | |||||||||
Agency claims indemnification(2) | 108.0 | 65.6 | |||||||||
Total | $ | 341.4 | $ | 408.8 | |||||||
Receivable with (Payable to) the FDIC | $ | 12.7 | $ | 18.6 |
(1) | As of December 31, 2016, the carrying value of the loan indemnification decreased by $115.6 million from December 31, 2015, which comprised of $85.3 million in claim submissions filed with the FDIC during the period and $30.3 million in other (yield and provision for credit losses adjustments). |
(2) | As of December 31, 2016, the carrying value of the agency claims indemnification increased by $42.4 million, which is primarily attributable to an increase in the amount of servicing-related obligations covered by the loss share agreement related to reverse mortgage loans. |
December 31, 2016 | December 31, 2015 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Unpaid principal balance | $ | 3,832.1 | $ | 4,372.8 | ||||||
Cumulative losses incurred | 3,727.8 | 3,623.4 | ||||||||
Cumulative claims | 3,722.9 | 3,608.4 | ||||||||
Cumulative reimbursement | 893.7 | 802.6 |
December 31, 2016 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SFR | Commercial(1) | Total | |||||||||||||
Unpaid principal balance | $ | 1,237.1 | $ | – | $ | 1,237.1 | |||||||||
Cumulative losses incurred | 416.6 | 9.0 | 425.6 | ||||||||||||
Cumulative claims | 416.4 | 9.0 | 425.4 | ||||||||||||
Cumulative reimbursement | – | – | – |
December 31, 2015 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SFR | Commercial(1) | Total | |||||||||||||
Unpaid principal balance | $ | 1,456.8 | $ | – | $ | 1,456.8 | |||||||||
Cumulative losses incurred | 408.5 | 9.0 | 417.5 | ||||||||||||
Cumulative claims | 407.2 | 9.0 | 416.2 | ||||||||||||
Cumulative reimbursement | – | – | – |
(1) | Due to the expiration of the loss share agreement covering commercial loans in December 2014, the outstanding unpaid principal balance eligible for reimbursement is zero. As provided by the loss share agreement, the loss recoveries for commercial loans extend for three years from expiration date (December 2017). As such, the cumulative losses incurred, claim submissions and reimbursements for commercial loans are reduced by the reported recoveries. |
December 31, 2016 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SFR | Commercial(1) | Total | |||||||||||||
Unpaid principal balance | $ | 68.8 | $ | – | $ | 68.8 | |||||||||
Cumulative losses incurred | 56.3 | 351.8 | 408.1 | ||||||||||||
Cumulative claims | 56.3 | 351.8 | 408.1 | ||||||||||||
Cumulative reimbursement | 45.0 | 281.4 | 326.4 |
December 31, 2015 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SFR | Commercial(1) | Total | |||||||||||||
Unpaid principal balance | $ | 89.3 | $ | – | $ | 89.3 | |||||||||
Cumulative losses incurred | 56.2 | 359.5 | 415.7 | ||||||||||||
Cumulative claims | 56.2 | 359.5 | 415.7 | ||||||||||||
Cumulative reimbursement | 45.0 | 287.6 | 332.6 |
(1) | Due to the expiration of the loss share agreement covering commercial loans in March 2015, the outstanding unpaid principal balance eligible for reimbursement is zero. As provided by the loss share agreement, the loss recoveries for commercial loans extend for three years from expiration date (March 2018). As such, the cumulative losses incurred, claim submissions and reimbursements for commercial loans are reduced by the reported recoveries. |
December 31, 2016 | December 31, 2015 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Railcars and locomotives | $ | 7,116.5 | $ | 6,591.9 | ||||||
Other equipment | 369.6 | 259.8 | ||||||||
Total(1) | $ | 7,486.1 | $ | 6,851.7 |
(1) | Includes equipment off-lease of $823.5 million and $493.2 million at December 31, 2016 and 2015, respectively, primarily consisting of rail assets. |
Years Ended December 31, | |||||||
---|---|---|---|---|---|---|---|
2017 | $ | 787.3 | |||||
2018 | 595.4 | ||||||
2019 | 389.0 | ||||||
2020 | 238.1 | ||||||
2021 | 129.6 | ||||||
Thereafter | 147.4 | ||||||
Total | $ | 2,286.8 |
December 31, 2016 | December 31, 2015 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Available-for-sale securities | ||||||||||
Debt securities | $ | 3,674.1 | $ | 2,007.8 | ||||||
Equity securities | 34.1 | 14.3 | ||||||||
Held-to-maturity securities | ||||||||||
Debt securities(1) | 243.0 | 300.1 | ||||||||
Securities carried at fair value with changes recorded in net income | ||||||||||
Debt securities | 283.5 | 339.7 | ||||||||
Non-marketable investments(2) | 256.4 | 291.8 | ||||||||
Total investment securities | $ | 4,491.1 | $ | 2,953.7 |
(1) | Recorded at amortized cost. |
(2) | Non-marketable investments include securities of the FRB and FHLB carried at cost of $239.7 million at December 31, 2016 and $263.5 million at December 31, 2015. The remaining non-marketable investments include ownership interests greater than 3% in limited partnership investments that are accounted for under the equity method, other investments carried at cost, which include qualified Community Reinvestment Act (CRA) investments, equity fund holdings and shares issued by customers during loan work out situations or as part of an original loan investment, totaling $16.7 million and $28.3 million at December 31, 2016 and December 31, 2015, respectively. |
Year Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Interest income — investments / reverse repos | $ | 82.1 | $ | 43.7 | $ | 14.1 | |||||||||
Interest income — interest bearing deposits | 33.1 | 17.1 | 17.7 | ||||||||||||
Dividends — investments | 16.7 | 10.4 | 3.7 | ||||||||||||
Total interest and dividends | $ | 131.9 | $ | 71.2 | $ | 35.5 |
December 31, 2016 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Debt securities AFS | ||||||||||||||||||
Mortgage-backed Securities | ||||||||||||||||||
U.S. government agency securities | $ | 2,073.6 | $ | 1.6 | $ | (32.3 | ) | $ | 2,042.9 | |||||||||
Non-agency securities | 471.7 | 15.6 | (1.8 | ) | 485.5 | |||||||||||||
U.S. government agency obligations | 649.9 | – | (3.9 | ) | 646.0 | |||||||||||||
U.S. Treasury securities | 299.9 | – | (0.4 | ) | 299.5 | |||||||||||||
Supranational and foreign government securities | 200.2 | – | – | 200.2 | ||||||||||||||
Total debt securities AFS | 3,695.3 | 17.2 | (38.4 | ) | 3,674.1 | |||||||||||||
Equity securities AFS | 35.0 | – | (0.9 | ) | 34.1 | |||||||||||||
Total securities AFS | $ | 3,730.3 | $ | 17.2 | $ | (39.3 | ) | $ | 3,708.2 | |||||||||
December 31, 2015 | ||||||||||||||||||
Debt securities AFS | ||||||||||||||||||
Mortgage-backed Securities | ||||||||||||||||||
U.S. government agency securities | $ | 148.4 | $ | – | $ | (0.9 | ) | $ | 147.5 | |||||||||
Non-agency securities | 573.9 | 0.4 | (7.2 | ) | 567.1 | |||||||||||||
U.S. government agency obligations | 996.8 | – | (3.7 | ) | 993.1 | |||||||||||||
U.S. Treasury securities | �� | – | – | – | – | |||||||||||||
Supranational and foreign government securities | 300.1 | – | – | 300.1 | ||||||||||||||
Total debt securities AFS | 2,019.2 | 0.4 | (11.8 | ) | 2,007.8 | |||||||||||||
Equity securities AFS | 14.4 | 0.1 | (0.2 | ) | 14.3 | |||||||||||||
Total securities AFS | $ | 2,033.6 | $ | 0.5 | $ | (12.0 | ) | $ | 2,022.1 |
December 31, 2016 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortized Cost | Fair Value | Weighted Average Yields | |||||||||||||
Mortgage-backed securities — U.S. government agency securities | |||||||||||||||
After 5 but within 10 years | $ | 55.1 | $ | 54.2 | 1.56 | % | |||||||||
Due after 10 years | 2,018.5 | 1,988.7 | 2.45 | % | |||||||||||
Total | 2,073.6 | 2,042.9 | 2.43 | % | |||||||||||
Mortgage-backed securities — non agency securities | |||||||||||||||
After 5 but within 10 years | 22.3 | 21.7 | 4.93 | % | |||||||||||
Due after 10 years | 449.4 | 463.8 | 5.88 | % | |||||||||||
Total | 471.7 | 485.5 | 5.84 | % | |||||||||||
U.S. government agency obligations | |||||||||||||||
After 1 but within 5 years | 649.9 | 646.0 | 1.22 | % | |||||||||||
Total | 649.9 | 646.0 | 1.22 | % | |||||||||||
U.S. Treasury Securities | |||||||||||||||
Due within 1 year | 200.1 | 200.1 | 0.36 | % | |||||||||||
After 1 but within 5 years | 99.8 | 99.4 | 0.93 | % | |||||||||||
Total | 299.9 | 299.5 | 0.55 | % | |||||||||||
Supranational and foreign government securities | |||||||||||||||
Due within 1 year | 200.2 | 200.2 | 0.36 | % | |||||||||||
Total | 200.2 | 200.2 | 0.36 | % | |||||||||||
Total debt securities available-for-sale | $ | 3,695.3 | $ | 3,674.1 | 2.38 | % |
December 31, 2016 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Less than 12 months | 12 months or greater | ||||||||||||||||||
Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | ||||||||||||||||
Debt securities AFS | |||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||
U.S. government agency securities | $ | 1,589.6 | $ | (31.8 | ) | $ | 13.8 | $ | (0.5 | ) | |||||||||
Non-agency securities | 56.5 | (1.4 | ) | 15.8 | (0.4 | ) | |||||||||||||
U.S. government agency obligations | 546.1 | (3.9 | ) | – | – | ||||||||||||||
U.S. Treasury Securities | 299.5 | (0.4 | ) | – | – | ||||||||||||||
Total debt securities AFS | 2,491.7 | (37.5 | ) | 29.6 | (0.9 | ) | |||||||||||||
Equity securities AFS | 34.1 | (0.9 | ) | – | – | ||||||||||||||
Total securities available-for-sale | $ | 2,525.8 | $ | (38.4 | ) | $ | 29.6 | $ | (0.9 | ) |
December 31, 2015 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Less than 12 months | 12 months or greater | ||||||||||||||||||
Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | ||||||||||||||||
Debt securities AFS | |||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||
U.S. government agency securities | $ | 147.0 | $ | (0.9 | ) | $ | – | $ | – | ||||||||||
Non-agency securities | 495.5 | (7.2 | ) | – | – | ||||||||||||||
U.S. government agency obligations | 943.0 | (3.7 | ) | – | – | ||||||||||||||
Total debt securities AFS | 1,585.5 | (11.8 | ) | – | – | ||||||||||||||
Equity securities AFS | 0.2 | (0.2 | ) | – | – | ||||||||||||||
Total securities available-for-sale | $ | 1,585.7 | $ | (12.0 | ) | $ | – | $ | – |
Year Ended December 31, 2016 | |||||||
---|---|---|---|---|---|---|---|
Beginning Balance | $ | 189.0 | |||||
Accretion into interest income | (29.2 | ) | |||||
Reclassifications from non-accretable difference due to increasing cash flows | 4.7 | ||||||
Reclassifications to non-accretable difference due to decreasing cash flows | 0.5 | ||||||
Balance at December 31, 2016 | $ | 165.0 |
Year Ended December 31, 2015 | |||||||
---|---|---|---|---|---|---|---|
Beginning Balance | $ | 204.4 | |||||
Accretion into interest income | (13.5 | ) | |||||
Reclassifications to non-accretable difference due to decreasing cash flows | (1.7 | ) | |||||
Disposals and Other | (0.2 | ) | |||||
Balance at December 31, 2015 | $ | 189.0 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2016 | ||||||||||||||||||
Mortgage-backed Securities — Non-agency | $ | 277.5 | $ | 6.7 | $ | (0.7 | ) | $ | 283.5 | |||||||||
Total Securities Carried at Fair Value with Changes Recorded in Net Income | $ | 277.5 | $ | 6.7 | $ | (0.7 | ) | $ | 283.5 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2015 | ||||||||||||||||||
Mortgage-backed Securities — Non-agency | $ | 343.8 | $ | 0.3 | $ | (4.4 | ) | $ | 339.7 | |||||||||
Total Securities Carried at Fair Value with Changes Recorded in Net Income | $ | 343.8 | $ | 0.3 | $ | (4.4 | ) | $ | 339.7 |
December 31, 2016 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortized Cost | Fair Value | Weighted Average Yield | |||||||||||||
Mortgage-backed securities — Non agency | |||||||||||||||
After 5 but within 10 years | $ | 0.3 | $ | 0.3 | 41.82 | % | |||||||||
Due after 10 years | 277.2 | 283.2 | 4.89 | % | |||||||||||
Total | $ | 277.5 | $ | 283.5 | 4.93 | % |
Carrying Value | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2016 | ||||||||||||||||||
Mortgage-backed securities | ||||||||||||||||||
U.S. government agency securities | $ | 110.0 | $ | 0.7 | $ | (3.3 | ) | $ | 107.4 | |||||||||
State and municipal | 27.7 | – | (0.5 | ) | 27.2 | |||||||||||||
Foreign government | 2.4 | – | – | 2.4 | ||||||||||||||
Corporate — foreign | 102.9 | 6.2 | – | 109.1 | ||||||||||||||
Total debt securities held-to-maturity | $ | 243.0 | $ | 6.9 | $ | (3.8 | ) | $ | 246.1 | |||||||||
December 31, 2015 | ||||||||||||||||||
Mortgage-backed securities | ||||||||||||||||||
U.S. government agency securities | $ | 147.2 | $ | 1.1 | $ | (2.6 | ) | $ | 145.7 | |||||||||
State and municipal | 37.1 | – | (1.6 | ) | 35.5 | |||||||||||||
Foreign government | 13.5 | – | – | 13.5 | ||||||||||||||
Corporate — foreign | 102.3 | 4.5 | – | 106.8 | ||||||||||||||
Total debt securities held-to-maturity | $ | 300.1 | $ | 5.6 | $ | (4.2 | ) | $ | 301.5 |
December 31, 2016 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortized Cost | Fair Value | Weighted Average Yield | |||||||||||||
Mortgage-backed securities — U.S. government agency securities | |||||||||||||||
Due after 10 years | $ | 110.0 | $ | 107.4 | 2.52 | % | |||||||||
Total | 110.0 | 107.4 | 2.52 | % | |||||||||||
State and municipal | |||||||||||||||
Due within 1 year | 0.5 | 0.5 | 2.09 | % | |||||||||||
After 1 but within 5 years | 0.5 | 0.5 | 2.46 | % | |||||||||||
After 5 but within 10 years | 0.5 | 0.5 | 2.70 | % | |||||||||||
Due after 10 years | 26.2 | 25.7 | 2.30 | % | |||||||||||
Total | 27.7 | 27.2 | 2.31 | % | |||||||||||
Foreign government | |||||||||||||||
Due within 1 year | 2.4 | 2.4 | 2.43 | % | |||||||||||
Total | 2.4 | 2.4 | 2.43 | % | |||||||||||
Corporate — Foreign securities | |||||||||||||||
After 1 but within 5 years | 102.9 | 109.1 | 4.35 | % | |||||||||||
Total | 102.9 | 109.1 | 4.35 | % | |||||||||||
Total debt securities held-to-maturity | $ | 243.0 | $ | 246.1 | 3.27 | % |
December 31, 2016 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Less than 12 months | 12 months or greater | ||||||||||||||||||
Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | ||||||||||||||||
Debt securities HTM | |||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||
U.S. government agency securities | $ | 68.2 | $ | (1.7 | ) | $ | 26.7 | $ | (1.6 | ) | |||||||||
State and municipal | 3.8 | (0.1 | ) | 22.4 | (0.4 | ) | |||||||||||||
Total securities held-to-maturity | $ | 72.0 | $ | (1.8 | ) | $ | 49.1 | $ | (2.0 | ) |
December 31, 2015 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Less than 12 months | 12 months or greater | ||||||||||||||||||
Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | ||||||||||||||||
Debt securities HTM | |||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||
U.S. government agency securities | $ | 62.2 | $ | (0.9 | ) | $ | 40.7 | $ | (1.7 | ) | |||||||||
State and municipal | 3.1 | (0.1 | ) | 28.2 | (1.5 | ) | |||||||||||||
Total securities held-to-maturity | $ | 65.3 | $ | (1.0 | ) | $ | 68.9 | $ | (3.2 | ) |
December 31, 2016 | December 31, 2015 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Tax credit investments and investments in unconsolidated subsidiaries(1) | $ | 220.2 | $ | 174.6 | ||||||
Current and deferred federal and state tax assets(2) | 201.3 | 1,212.4 | ||||||||
Property, furniture and fixtures | 191.1 | 196.3 | ||||||||
Fair value of derivative financial instruments | 111.2 | 140.7 | ||||||||
Other real estate owned and repossessed assets | 72.7 | 123.5 | ||||||||
Tax receivables, other than income taxes | 50.7 | 97.2 | ||||||||
Other counterparty receivables | 42.8 | 59.0 | ||||||||
Other(3)(4) | 350.4 | 465.2 | ||||||||
Total other assets | $ | 1,240.4 | $ | 2,468.9 |
(1) | Included in this balance are affordable housing investments of $151.3 million and $108.4 million as of December 31, 2016 and December 31, 2015, respectively that provide tax benefits to investors in the form of tax deductions from operating losses and tax credits. As a limited partner, the Company has no significant influence over the operations. In 2016 and 2015, the Company recognized pre-tax losses of $12.1 million and $5.2 million, respectively related to these affordable housing investments. In addition, the Company recognized total tax benefits of $20.6 million and $8.7 million, respectively which included tax credits of $15.9 million and $6.7 million recorded in income taxes. The Company is periodically required to provide additional financial support during the investment period. The Company’s liability for these unfunded commitments was $62.3 million and $15.7 million at December 31, 2016 and December 31, 2015, respectively. See Note 10 — Borrowings. |
(2) | The decrease is primarily due to the establishment of $847 million deferred tax liabilities related to the change in assertion with respect to indefinite reinvestment of foreign earnings related to the Commercial Air business. See Note 19 — Income Taxes. |
(3) | Other includes executive retirement plan and deferred compensation, other deferred charges, prepaid expenses, accrued interest and dividends, and other miscellaneous assets. |
(4) | Other also includes servicing advances. In connection with the OneWest Transaction, the Company acquired the servicing obligations for residential mortgage loans. As of December 31, 2016 and December 31, 2015, the loans serviced for others total $15.6 billion and $17.4 billion for reverse mortgage loans and $55.1 million and $87.4 million for single family mortgage loans, respectively. |
December 31, 2016 | December 31, 2015 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Deposits Outstanding | $ | 32,304.3 | $ | 32,761.4 | ||||||
Weighted average contractual interest rate | 1.19 | % | 1.26 | % | ||||||
Weighted average remaining number of days to maturity(1) | 641 | days | 864 | days |
(1) | Excludes deposit balances with no stated maturity. |
Year Ended December 31, 2016 | Year Ended December 31, 2015 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Daily average deposits | $ | 32,628.4 | $ | 23,223.0 | ||||||
Maximum amount outstanding | 33,209.9 | 32,868.5 | ||||||||
Weighted average contractual interest rate for the year | 1.23 | % | 1.46 | % |
December 31, 2016 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Amount | Average Rate | ||||||||||
Deposits – no stated maturity | |||||||||||
Non-interest-bearing checking | $ | 1,255.6 | – | ||||||||
Interest-bearing checking | 3,251.8 | 0.54 | % | ||||||||
Money market | 6,593.3 | 0.85 | % | ||||||||
Savings | 4,303.0 | 0.88 | % | ||||||||
Other | 162.0 | NM | |||||||||
Total checking and savings deposits | 15,565.7 | ||||||||||
Certificates of deposit, remaining contractual maturity: | |||||||||||
Within one year | 8,659.6 | 1.14 | % | ||||||||
One to two years | 2,673.2 | 1.42 | % | ||||||||
Two to three years | 2,072.3 | 2.27 | % | ||||||||
Three to four years | 1,555.8 | 2.27 | % | ||||||||
Four to five years | 628.2 | 2.41 | % | ||||||||
Over five years | 1,139.9 | 3.27 | % | ||||||||
Total certificates of deposit | 16,729.0 | ||||||||||
Purchase accounting adjustments | 9.6 | ||||||||||
Total Deposits | $ | 32,304.3 | – |
December 31, 2016 | December 31, 2015 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
U.S. certificates of deposits: | ||||||||||
Three months or less | $ | 1,725.4 | $ | 1,476.5 | ||||||
After three months through six months | 1,902.6 | 1,462.6 | ||||||||
After six months through twelve months | 2,907.7 | 2,687.2 | ||||||||
After twelve months | 7,013.4 | 9,245.8 | ||||||||
Total | $ | 13,549.1 | $ | 14,872.1 |
December 31, 2016 | December 31, 2015 | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
CIT Group Inc. | Subsidiaries | Total | Total | ||||||||||||||||
Senior Unsecured | $ | 10,599.0 | $ | – | $ | 10,599.0 | $ | 10,636.3 | |||||||||||
Secured borrowings: | |||||||||||||||||||
Structured financings | – | 1,925.7 | 1,925.7 | 2,596.4 | |||||||||||||||
FHLB advances | – | 2,410.8 | 2,410.8 | 3,117.6 | |||||||||||||||
Total Borrowings | $ | 10,599.0 | $ | 4,336.5 | $ | 14,935.5 | $ | 16,350.3 |
(1) | December 31, 2015 balances for Senior Unsecured and Structured Financing were adjusted to include deferred debt issuance costs of $41.4 million and $10.0 million, respectively, compared to balances presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, upon adoption and in accordance with the provision in ASU 2015-03. Previously these amounts were included in other assets. |
2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Contractual Maturities | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Senior unsecured notes | $ | 1,978.6 | $ | 3,115.9 | $ | 2,750.0 | $ | 750.0 | $ | – | $ | 2,051.4 | $ | 10,645.9 | ||||||||||||||||
Structured financings | 328.1 | 281.4 | 787.2 | 68.8 | 61.1 | 411.9 | 1,938.5 | |||||||||||||||||||||||
FHLB advances | 15.0 | 1,150.0 | 1,245.5 | – | – | – | 2,410.5 | |||||||||||||||||||||||
$ | 2,321.7 | $ | 4,547.3 | $ | 4,782.7 | $ | 818.8 | $ | 61.1 | $ | 2,463.3 | $ | 14,994.9 |
Maturity Date | Rate (%) | Date of Issuance | Par Value | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 2017 | 5.000 | % | May 2012 | $ | 252.8 | |||||||||
August 2017 | 4.250 | % | August 2012 | 1,725.8 | ||||||||||
March 2018 | 5.250 | % | March 2012 | 1,465.0 | ||||||||||
April 2018 | 6.625 | % | March 2011 | 695.0 | ||||||||||
May 2018(1) | 5.000 | % | December 2016 | 955.9 | ||||||||||
February 2019 | 5.500 | % | February 2012 | 1,750.0 | ||||||||||
February 2019 | 3.875 | % | February 2014 | 1,000.0 | ||||||||||
May 2020 | 5.375 | % | May 2012 | 750.0 | ||||||||||
August 2022 | 5.000 | % | August 2012 | 1,250.0 | ||||||||||
August 2023 | 5.000 | % | August 2013 | 750.0 | ||||||||||
Weighted average rate and total | 5.02 | % | $ | 10,594.5 |
(1) | Reflects amounts tendered and exchanged to extend maturity of notes originally issued in May 2012 by one year. |
Notes will be redeemable at the Company’s option at 100.50% of the principal amount of the New Notes. Approximately $956 million of the aggregate principal amount of outstanding Old Notes were validly tendered and exchanged as of December 31, 2016.
December 31, 2016 | December 31, 2015 | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
FHLB Advances | Pledged Assets | FHLB Advances | Pledged Assets | ||||||||||||||||
Total | $ | 2,410.8 | $ | 6,389.7 | �� | $ | 3,117.6 | $ | 6,783.1 |
December 31, 2016 | December 31, 2015 | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Secured Borrowing | Pledged Assets | Secured Borrowing | Pledged Assets | ||||||||||||||||
Business Capital(2) | $ | 949.8 | $ | 2,608.0 | $ | 1,128.6 | $ | 2,434.1 | |||||||||||
Rail(3)(4) | 860.1 | 1,327.5 | 917.0 | 1,344.4 | |||||||||||||||
Commercial Finance | – | 0.2 | – | 0.2 | |||||||||||||||
Subtotal — Commercial Banking | 1,809.9 | 3,935.7 | 2,045.6 | 3,778.7 | |||||||||||||||
Non-Strategic Portfolios(3) | 115.8 | 212.6 | 550.8 | 734.2 | |||||||||||||||
Total | $ | 1,925.7 | $ | 4,148.3 | $ | 2,596.4 | $ | 4,512.9 |
(1) | As part of our liquidity management strategy, the Company pledges assets to secure financing transactions (which include securitizations), and for other purposes as required or permitted by law while CIT Bank also pledges assets to secure borrowings from the FHLB and access the FRB discount window. |
(2) | In 2016, the Company established a $1 billion, three-year asset-based lending facility in support of its factoring business in Business Capital. The 2016 secured borrowings and pledged assets include balances under this facility. |
(3) | Management identified $8 million and $22 million of errors related to Rail and Non-Strategic Portfolios pledged assets, respectively, at December 31, 2015, which were revised. |
(4) | At December 31, 2016, the TRS Transactions related borrowings and pledged assets, respectively, of $528.7 million and $838.3 million were included in Commercial Banking. The TRS Transactions are described in Note 11 — Derivative Financial Instruments. |
February 2017, the Company repaid secured debt related to Commercial Air. SeeNote 31 — Subsequent Events for additional detail.
Unconsolidated VIEs Carrying Value December 31, 2016 | Unconsolidated VIEs Carrying Value December 31, 2015 | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Securities | Partnership Investment | Securities | Partnership Investment | ||||||||||||||||
Agency securities(1) | $ | 2,152.9 | $ | – | $ | 294.5 | $ | – | |||||||||||
Non agency securities — Other servicer | 769.0 | – | 906.8 | – | |||||||||||||||
Tax credit equity investments | – | 167.7 | – | 125.0 | |||||||||||||||
Equity investments(2) | – | 11.4 | – | 15.4 | |||||||||||||||
Total Assets | $ | 2,921.9 | $ | 179.1 | $ | 1,201.3 | $ | 140.4 | |||||||||||
Commitments to tax credit investments | – | 62.3 | – | 15.7 | |||||||||||||||
Total Liabilities | $ | – | $ | 62.3 | $ | – | $ | 15.7 | |||||||||||
Maximum loss exposure(3) | $ | 2,921.9 | $ | 179.1 | $ | 1,201.3 | $ | 140.4 |
(1) | The Company discovered and corrected an immaterial error impacting the disclosure of agency securities in the amount of $147.0 million as of December 31, 2015. |
(2) | In preparing the financial statements for the year ended December 31, 2016, the Company discovered and corrected an immaterial omission of disclosure of equity investments as of December 31, 2015. |
(3) | Maximum loss exposure to the unconsolidated VIEs excludes the liability for representations and warranties, corporate guarantees and also excludes servicing advances. |
December 31, 2016 | December 31, 2015 | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Notional Amount | Asset Fair Value | Liability Fair Value | Notional Amount | Asset Fair Value | Liability Fair Value | ||||||||||||||||||||||
Qualifying Hedges | |||||||||||||||||||||||||||
Foreign currency forward contracts — net investment hedges | $ | 817.9 | $ | 16.9 | $ | – | $ | 787.6 | $ | 45.5 | $ | (0.3 | ) | ||||||||||||||
Total Qualifying Hedges | 817.9 | 16.9 | – | 787.6 | 45.5 | (0.3 | ) | ||||||||||||||||||||
Non-Qualifying Hedges | |||||||||||||||||||||||||||
Interest rate swaps(2) | 5,309.2 | 63.0 | (50.1 | ) | 4,607.6 | 45.1 | (37.9 | ) | |||||||||||||||||||
Written options | 2,626.5 | 0.1 | (1.0 | ) | 3,346.1 | 0.1 | (2.5 | ) | |||||||||||||||||||
Purchased options | 2,129.6 | 1.0 | (0.1 | ) | 2,342.5 | 2.2 | (0.1 | ) | |||||||||||||||||||
Foreign currency forward contracts | 1,329.8 | 30.2 | (6.0 | ) | 1,624.2 | 47.8 | (6.6 | ) | |||||||||||||||||||
Total Return Swap (TRS) | 587.5 | – | (11.3 | ) | 1,152.8 | – | (54.9 | ) | |||||||||||||||||||
Equity Warrants | 1.0 | 0.2 | – | 1.0 | 0.3 | – | |||||||||||||||||||||
Interest Rate Lock Commitments | 20.7 | 0.1 | (0.1 | ) | 9.9 | 0.1 | – | ||||||||||||||||||||
Forward sale commitments on agency MBS | 39.0 | 0.1 | – | – | – | – | |||||||||||||||||||||
Credit derivatives | 267.6 | – | (0.2 | ) | 37.6 | – | (0.3 | ) | |||||||||||||||||||
Total Non-qualifying Hedges | 12,310.9 | 94.7 | (68.8 | ) | 13,121.7 | 95.6 | (102.3 | ) | |||||||||||||||||||
Total Hedges | $ | 13,128.8 | $ | 111.6 | $ | (68.8 | ) | $ | 13,909.3 | $ | 141.1 | $ | (102.6 | ) |
(1) | Presented on a gross basis. |
(2) | Fair value balances include accrued interest. |
- | Funding costs for similar financings based on current market conditions; |
- | Forecasted amortization, due to principal payments on the underlying ABS, which impacts the amount of the unutilized portion; and |
- | Specific to the Dutch TRS, forecasted usage of the long-dated facilities through the final maturity date in 2028. |
quarter of 2016. As a result of the Termination Agreement, the unsecured counterparty receivable held by GSI under the Canadian TRS was also released.
- | A fixed facility fee of 2.85% per annum times the maximum facility commitment amount, (the facility fee on the Canadian TRS was reduced to zero effective December 7, 2016) |
- | A variable amount based on one-month or three-month USD LIBOR times the “utilized amount” (effectively the “adjusted qualifying borrowing base”) of the total return swap, and |
- | A reduction in interest expense due to the recognition of the payment of any original issue discount from GSI on the various ABS. |
Gross Amounts not offset in the Consolidated Balance Sheet | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gross Amount of Recognized Assets (Liabilities) | Gross Amount Offset in the Consolidated Balance Sheet | Net Amount Presented in the Consolidated Balance Sheet | Derivative Financial Instruments(1) | Cash Collateral Pledged / (Received)(1)(2) | Net Amount | ||||||||||||||||||||||
December 31, 2016 | |||||||||||||||||||||||||||
Derivative assets | $ | 111.6 | $ | – | $ | 111.6 | $ | (30.9 | ) | $ | (48.7 | ) | $ | 32.0 | |||||||||||||
Derivative liabilities | (68.8 | ) | – | (68.8 | ) | 30.9 | 5.0 | (32.9 | ) | ||||||||||||||||||
December 31, 2015 | |||||||||||||||||||||||||||
Derivative assets | $ | 141.1 | $ | – | $ | 141.1 | $ | (9.7 | ) | $ | (82.7 | ) | $ | 48.7 | |||||||||||||
Derivative liabilities | (102.6 | ) | – | (102.6 | ) | 9.7 | 31.8 | (61.1 | ) |
(1) | The Company’s derivative transactions are governed by ISDA agreements that allow for net settlements of certain payments as well as offsetting of all contracts (“Derivative Financial Instruments”) with a given counterparty in the event of bankruptcy or default of one of the two parties to the transaction. We believe our ISDA agreements meet the definition of a master netting arrangement or similar agreement for purposes of the above disclosure. In conjunction with the ISDA agreements, the Company has entered into collateral arrangements with its counterparties which provide for the exchange of cash depending on change in the market valuation of the derivative contracts outstanding. Such collateral is available to be applied in settlement of the net balances upon an event of default of one of the counterparties. |
(2) | Collateral pledged or received is included in Other assets or Other liabilities, respectively. |
Years Ended December 31, | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Derivative Instruments | Gain / (Loss) Recognized | 2016 | 2015 | 2014 | |||||||||||||||
Non Qualifying Hedges | |||||||||||||||||||
Cross currency swaps | Other income | – | – | 4.1 | |||||||||||||||
Interest rate swaps | Other income | 7.9 | 4.6 | (5.2 | ) | ||||||||||||||
Interest rate options | Other income | 0.6 | 1.6 | (2.4 | ) | ||||||||||||||
Foreign currency forward contracts | Other income | 26.2 | 116.5 | 118.1 | |||||||||||||||
Equity warrants | Other income | (0.2 | ) | 0.2 | (0.7 | ) | |||||||||||||
TRS | Other income | 43.6 | (30.4 | ) | (14.8 | ) | |||||||||||||
Rate Locks | Other income | (0.2 | ) | – | – | ||||||||||||||
Forward sale commitments on agency MBS | Other income | 1.1 | – | – | |||||||||||||||
Risk Participation Agreements | Other income | 1.8 | – | – | |||||||||||||||
Total Non-qualifying Hedges | 80.8 | 92.5 | 99.1 | ||||||||||||||||
Total derivatives-income statement impact | $ | 80.8 | $ | 92.5 | $ | 99.1 |
Contract Type | Derivatives — effective portion reclassified from AOCI to income | Hedge ineffectiveness recorded directly in income | Total income statement impact | Derivatives — effective portion recorded in OCI | Total change in OCI for period | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year Ended December 31, 2016 | ||||||||||||||||||||||
Foreign currency forward contracts — net investment hedges | $ | 1.8 | $ | – | $ | 1.8 | $ | 2.7 | $ | 0.9 | ||||||||||||
Total | $ | 1.8 | $ | – | $ | 1.8 | $ | 2.7 | $ | 0.9 | ||||||||||||
Year Ended December 31, 2015 | ||||||||||||||||||||||
Foreign currency forward contracts — cash flow hedges | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||||||
Foreign currency forward contracts — net investment hedges | 33.8 | – | 33.8 | 128.4 | 94.6 | |||||||||||||||||
Cross currency swaps — net investment hedges | – | – | – | – | – | |||||||||||||||||
Total | $ | 33.8 | $ | – | $ | 33.8 | $ | 128.4 | $ | 94.6 | ||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||||
Foreign currency forward contracts — cash flow hedges | $ | – | $ | – | $ | – | $ | 0.2 | $ | 0.2 | ||||||||||||
Foreign currency forward contracts — net investment hedges | (18.1 | ) | – | (18.1 | ) | 111.1 | 129.2 | |||||||||||||||
Cross currency swaps — net investment hedges | – | – | – | 1.1 | 1.1 | |||||||||||||||||
Total | $ | (18.1 | ) | $ | – | $ | (18.1 | ) | $ | 112.4 | $ | 130.5 |
December 31, 2016 | December 31, 2015 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Accrued expenses and accounts payable | $ | 580.4 | $ | 608.9 | ||||||
Current and deferred taxes payable | 250.6 | 214.6 | ||||||||
Accrued interest payable | 181.2 | 201.9 | ||||||||
Fair value of derivative financial instruments | 69.0 | 102.6 | ||||||||
Security and other deposits | 59.0 | 107.9 | ||||||||
Equipment maintenance reserves | 45.9 | 32.3 | ||||||||
Other(1) | 711.5 | 420.8 | ||||||||
Total other liabilities | $ | 1,897.6 | $ | 1,689.0 |
(1) | Other consists of unsettled investment security purchased of $201.2 million and $0 million as of December 31, 2016 and 2015, respectively, contingent performance liability, and other miscellaneous liabilities. |
Total | Level 1 | Level 2 | Level 3 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2016 | ||||||||||||||||||
Assets | ||||||||||||||||||
Debt Securities AFS | $ | 3,674.1 | $ | 200.1 | $ | 2,988.5 | $ | 485.5 | ||||||||||
Securities carried at fair value with changes recorded in net income | 283.5 | – | – | 283.5 | ||||||||||||||
Equity Securities AFS | 34.1 | 0.3 | 33.8 | – | ||||||||||||||
Derivative assets at fair value — non-qualifying hedges(1) | 94.7 | – | 94.7 | – | ||||||||||||||
Derivative assets at fair value — qualifying hedges | 16.9 | – | 16.9 | – | ||||||||||||||
Total | $ | 4,103.3 | $ | 200.4 | $ | 3,133.9 | $ | 769.0 | ||||||||||
Liabilities | ||||||||||||||||||
Derivative liabilities at fair value — non-qualifying hedges(1) | $ | (68.8 | ) | $ | – | $ | (57.3 | ) | $ | (11.5 | ) | |||||||
Consideration holdback liability | (47.2 | ) | – | – | (47.2 | ) | ||||||||||||
FDIC True-up Liability | (61.9 | ) | – | – | (61.9 | ) | ||||||||||||
Total | $ | (177.9 | ) | $ | – | $ | (57.3 | ) | $ | (120.6 | ) | |||||||
December 31, 2015 | ||||||||||||||||||
Assets | ||||||||||||||||||
Debt Securities AFS | $ | 2,007.8 | $ | – | $ | 1,440.7 | $ | 567.1 | ||||||||||
Securities carried at fair value with changes recorded in net income | 339.7 | – | – | 339.7 | ||||||||||||||
Equity Securities AFS | 14.3 | 0.3 | 14.0 | – | ||||||||||||||
FDIC receivable | 54.8 | – | – | 54.8 | ||||||||||||||
Derivative assets at fair value — non-qualifying hedges(1) | 95.6 | – | 95.6 | – | ||||||||||||||
Derivative assets at fair value — qualifying hedges | 45.5 | – | 45.5 | – | ||||||||||||||
Total | $ | 2,557.7 | $ | 0.3 | $ | 1,595.8 | $ | 961.6 | ||||||||||
Liabilities | ||||||||||||||||||
Derivative liabilities at fair value — non-qualifying hedges(1) | $ | (102.3 | ) | $ | – | $ | (46.8 | ) | $ | (55.5 | ) | |||||||
Derivative liabilities at fair value — qualifying hedges | (0.3 | ) | – | (0.3 | ) | – | ||||||||||||
Consideration holdback liability | (60.8 | ) | – | – | (60.8 | ) | ||||||||||||
FDIC True-up Liability | (56.9 | ) | – | – | (56.9 | ) | ||||||||||||
Total | $ | (220.3 | ) | $ | – | $ | (47.1 | ) | $ | (173.2 | ) |
(1) | Derivative fair values include accrued interest. |
Financial Instrument | Estimated Fair Value | Valuation Technique(s) | Significant Unobservable Inputs | Range of Inputs | Weighted Average | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2016 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Securities — AFS | $ | 485.5 | Discounted cash flow | Discount Rate | 0.0% – 96.4% | 5.5% | |||||||||||||||||
Prepayment Rate | 3.2% – 21.2% | 8.8% | |||||||||||||||||||||
Default Rate | 0.0% – 9.0% | 3.9% | |||||||||||||||||||||
Loss Severity | 1.0% – 79.8% | 36.3% | |||||||||||||||||||||
Securities carried at fair value with changes recorded in net income | 283.5 | Discounted cash flow | Discount Rate | 0.0% – 34.6% | 5.6% | ||||||||||||||||||
Prepayment Rate | 6.1% – 16.2% | 11.9% | |||||||||||||||||||||
Default Rate | 1.9% – 8.1% | 4.6% | |||||||||||||||||||||
Loss Severity | 22.2% – 44.7% | 25.8% | |||||||||||||||||||||
Total Assets | $ | 769.0 | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
FDIC True-up liability | $ | (61.9 | ) | Discounted cash flow | Discount Rate | 3.2% | 3.2% | ||||||||||||||||
Consideration holdback liability | (47.2 | ) | Discounted cash flow | Payment Probability | 0% – 100% | 40.9% | |||||||||||||||||
Discount Rate | 1.3% – 4.0% | 2.1% | |||||||||||||||||||||
Derivative liabilities — non qualifying | (11.5 | ) | Market Comparables(1) | ||||||||||||||||||||
Total Liabilities | $ | (120.6 | ) | ||||||||||||||||||||
December 31, 2015 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Securities — AFS | $ | 567.1 | Discounted cash flow | Discount Rate | 0.0% – 94.5% | 6.4% | |||||||||||||||||
Prepayment Rate | 2.7% – 20.8% | 9.2% | |||||||||||||||||||||
Default Rate | 0.0% – 9.5% | 4.1% | |||||||||||||||||||||
Loss Severity | 0.2% – 83.5% | 36.4% | |||||||||||||||||||||
Securities carried at fair value with changes recorded in net income | 339.7 | Discounted cash flow | Discount Rate | 0.0% – 19.9% | 6.3% | ||||||||||||||||||
Prepayment Rate | 2.5% – 22.4% | 11.5% | |||||||||||||||||||||
Default Rate | 0.0% – 5.9% | 4.1% | |||||||||||||||||||||
Loss Severity | 3.8% – 39.0% | 25.1% | |||||||||||||||||||||
FDIC Receivable | 54.8 | Discounted cash flow | Discount Rate | 7.8% – 18.4% | 9.4% | ||||||||||||||||||
Prepayment Rate | 2.0% – 14.0% | 3.6% | |||||||||||||||||||||
Default Rate | 6.0% – 36.0% | 10.8% | |||||||||||||||||||||
Loss Severity | 20.0% – 65.0% | 31.6% | |||||||||||||||||||||
Total Assets | $ | 961.6 | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
FDIC True-up liability | $ | (56.9 | ) | Discounted cash flow | Discount Rate | 4.1% | 4.1% | ||||||||||||||||
Consideration holdback liability | (60.8 | ) | Discounted cash flow | Payment Probability | 0% – 100% | 53.8% | |||||||||||||||||
Discount Rate | 1.3% – 3.9% | 3.0% | |||||||||||||||||||||
Derivative liabilities — non qualifying | (55.5 | ) | Market Comparables(1) | ||||||||||||||||||||
Total Liabilities | $ | (173.2 | ) |
(1) | The valuation of these derivatives is primarily related to the TRS Transactions, which is based on several factors using a discounted cash flow methodology, including a) funding costs for similar financings based on current market conditions; b) forecasted usage of long-dated facilities through the final maturity date in 2028; and c) forecasted amortization, due to principal payments on the underlying ABS, which impacts the amount of the unutilized portion. |
- | Discounted cash flow — Discounted cash flow valuation techniques generally consist of developing an estimate of future cash flows that are expected to occur over the life of an instrument and then discounting those cash flows at a rate of return that results in the estimated fair value amount. The Company utilizes both the direct and indirect valuation methods. Under the direct method, contractual cash flows are adjusted for expected losses. The adjusted cash flows are discounted at a rate which considers other costs and risks, such as market risk and liquidity. Under the indirect method, contractual cash flows are discounted at a rate which reflects the costs and risks associated with the likelihood of generating the contractual cash flows. |
- | Market comparables — Market comparable(s) pricing valuation techniques are used to determine the estimated fair value of certain instruments by incorporating known inputs such as recent transaction prices, pending transactions, or prices of other similar investments which require significant adjustment to reflect differences in instrument characteristics. |
- | Default rate — is an estimate of the likelihood of not collecting contractual amounts owed expressed as a constant default rate. |
- | Discount rate — is a rate of return used to present value the future expected cash flows to arrive at the estimated fair value of an instrument. The discount rate consists of a benchmark rate component and a risk premium component. The benchmark rate component, for example, LIBOR or U.S. Treasury rates, is generally observable within the market and is necessary to appropriately reflect the time value of money. The risk premium component reflects the amount of compensation market participants require due to the uncertainty inherent in the instruments’ cash flows resulting from risks such as credit and liquidity. |
- | Loss severity — is the percentage of contractual cash flows lost in the event of a default. |
- | Prepayment rate — is the estimated rate at which forecasted prepayments of principal of the related loan or debt instrument are expected to occur, expressed as a constant prepayment rate (“CPR”). |
- | Payment Probability — is an estimate of the likelihood the consideration holdback amount will be required to be paid expressed as a percentage. |
Securities- AFS | Securities carried at fair value with changes recorded in net income | FDIC Receivable | Derivative liabilities — non-qualifying(1) | FDIC True-up Liability | Consideration holdback Liability | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2015 | $ | 567.1 | $ | 339.7 | $ | 54.8 | $ | (55.5 | ) | $ | (56.9 | ) | $ | (60.8 | ) | |||||||||||
Included in earnings | (5.8 | ) | 13.0 | 10.7 | 44.0 | (5.0 | ) | (0.7 | ) | |||||||||||||||||
Included in comprehensive income | 20.6 | – | – | – | – | – | ||||||||||||||||||||
Impairment | (3.3 | ) | – | – | – | – | – | |||||||||||||||||||
Paydowns and adjustments | (93.1 | ) | (69.2 | ) | (64.9 | ) | – | – | 14.3 | |||||||||||||||||
Balance as of December 31, 2016 | $ | 485.5 | $ | 283.5 | $ | 0.6 | $ | (11.5 | ) | $ | (61.9 | ) | $ | (47.2 | ) | |||||||||||
December 31, 2014 | $ | – | $ | – | $ | – | $ | (26.6 | ) | $ | – | $ | – | |||||||||||||
Included in earnings | (2.9 | ) | (2.5 | ) | 3.4 | (28.9 | ) | (0.6 | ) | – | ||||||||||||||||
Included in comprehensive income | (6.8 | ) | – | – | – | – | – | |||||||||||||||||||
Impairment | (2.8 | ) | – | – | – | – | – | |||||||||||||||||||
Purchases | 619.4 | 373.4 | 54.8 | – | (56.3 | ) | (60.8 | ) | ||||||||||||||||||
Paydowns | (39.8 | ) | (31.2 | ) | (3.4 | ) | – | – | – | |||||||||||||||||
Balance as of December 31, 2015 | $ | 567.1 | $ | 339.7 | $ | 54.8 | $ | (55.5 | ) | $ | (56.9 | ) | $ | (60.8 | ) |
(1) | Valuation of the derivatives related to the TRS Transactions and written options on certain CIT Bank CDs. |
Fair Value Measurements at Reporting Date Using: | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total | Level 1 | Level 2 | Level 3 | Total (Losses) | |||||||||||||||||||
Assets | |||||||||||||||||||||||
December 31, 2016 | |||||||||||||||||||||||
Goodwill | $ | 51.8 | $ | – | $ | – | $ | 51.8 | $ | (354.2 | ) | ||||||||||||
Assets held for sale | 201.6 | – | – | 201.6 | (14.7 | ) | |||||||||||||||||
Other real estate owned | 22.5 | – | – | 22.5 | (3.2 | ) | |||||||||||||||||
Impaired loans | 151.9 | – | – | 151.9 | (26.8 | ) | |||||||||||||||||
Total | $ | 427.8 | $ | – | $ | – | $ | 427.8 | $ | (398.9 | ) | ||||||||||||
December 31, 2015 | |||||||||||||||||||||||
Assets held for sale | $ | 1,648.3 | $ | – | $ | 31.0 | $ | 1,617.3 | $ | (32.0 | ) | ||||||||||||
Other real estate owned(1) | 33.6 | – | – | 33.6 | (3.8 | ) | |||||||||||||||||
Impaired loans | 112.3 | – | – | 112.3 | (21.6 | ) | |||||||||||||||||
Total | $ | 1,794.2 | $ | – | $ | 31.0 | $ | 1,763.2 | $ | (57.4 | ) |
(1) | In preparing the year-end financial statements as of December 31, 2016, the Company discovered and corrected an immaterial disclosure error impacting the carrying amount and total losses related to Other real estate owned in the amount of $93.8 million (carrying amount) and $1.9 million (total losses) as of December 31, 2015. |
Goodwill — In accordance with ASC 350, Intangibles — Goodwill and other, goodwill is assessed for impairment at least annually, or more often if events or circumstances have changed significantly from the annual test date that would indicate a potential reduction in the fair value of the reporting unit below its carrying value. During the fourth quarter of 2016, the Company performed its annual goodwill impairment test. Based on our assessments under both Step 1 and Step 2, the Company recorded an impairment of the Consumer Banking and Commercial Services RUs of $319.4 million and $34.8 million, respectively.See Note 26 — Goodwill and Intangible Assets for further information.
December 31, 2015 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(dollars in millions) | Estimated Fair Value Carrying Amount | Aggregate Unpaid Principal | Difference Between Estimated Fair Value and 100% Aggregate Unpaid Principal Balance | ||||||||||||
FDIC Receivable | $ | 54.8 | $ | 204.5 | $ | 149.7 |
Estimated Fair Value | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Carrying Value | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
December 31, 2016 | |||||||||||||||||||||||
Financial Assets | |||||||||||||||||||||||
Cash and interest bearing deposits | $ | 6,430.6 | $ | 6,430.6 | $ | – | $ | – | $ | 6,430.6 | |||||||||||||
Derivative assets at fair value — non-qualifying hedges | 94.7 | – | 94.7 | – | 94.7 | ||||||||||||||||||
Derivative assets at fair value — qualifying hedges | 16.9 | – | 16.9 | – | 16.9 | ||||||||||||||||||
Assets held for sale (excluding leases) | 428.4 | – | 175.0 | 264.6 | 439.6 | ||||||||||||||||||
Loans (excluding leases) | 26,683.0 | – | 390.3 | 26,456.4 | 26,846.7 | ||||||||||||||||||
Investment securities(1) | 4,491.1 | 200.4 | 3,199.6 | 1,094.2 | 4,494.2 | ||||||||||||||||||
Indemnification assets(2) | 233.4 | – | – | 201.0 | 201.0 | ||||||||||||||||||
Other assets subject to fair value disclosure and unsecured counterparty receivables(3) | 712.2 | – | – | 712.2 | 712.2 | ||||||||||||||||||
Financial Liabilities | |||||||||||||||||||||||
Deposits(4) | (32,323.2 | ) | – | – | (32,490.9 | ) | (32,490.9 | ) | |||||||||||||||
Derivative liabilities at fair value — non-qualifying hedges | (68.8 | ) | – | (57.3 | ) | (11.5 | ) | (68.8 | ) | ||||||||||||||
Borrowings(4) | (15,097.8 | ) | – | (14,457.8 | ) | (1,104.9 | ) | (15,562.7 | ) | ||||||||||||||
Credit balances of factoring clients | (1,292.0 | ) | – | – | (1,292.0 | ) | (1,292.0 | ) | |||||||||||||||
Other liabilities subject to fair value disclosure(5) | (1,003.6 | ) | – | – | (1,003.6 | ) | (1,003.6 | ) | |||||||||||||||
December 31, 2015 | |||||||||||||||||||||||
Financial Assets | |||||||||||||||||||||||
Cash and interest bearing deposits | $ | 7,652.4 | $ | 7,652.4 | $ | – | $ | – | $ | 7,652.4 | |||||||||||||
Derivative assets at fair value — non-qualifying hedges | 95.6 | – | 95.6 | – | 95.6 | ||||||||||||||||||
Derivative assets at fair value — qualifying hedges | 45.5 | – | 45.5 | – | 45.5 | ||||||||||||||||||
Assets held for sale (excluding leases) | 738.8 | 21.8 | 55.8 | 669.1 | 746.7 | ||||||||||||||||||
Loans (excluding leases) | 27,599.6 | – | 975.5 | 25,893.2 | 26,868.7 | ||||||||||||||||||
Investment securities(1) | 2,953.7 | 11.4 | 1,678.7 | 1,265.0 | 2,955.1 | ||||||||||||||||||
Indemnification assets(2) | 343.2 | – | – | 323.2 | 323.2 | ||||||||||||||||||
Other assets subject to fair value disclosure and unsecured counterparty receivables(3) | 936.5 | – | – | 936.5 | 936.5 | ||||||||||||||||||
Financial Liabilities | |||||||||||||||||||||||
Deposits(4) | (32,793.1 | ) | – | – | (32,951.4 | ) | (32,951.4 | ) | |||||||||||||||
Derivative liabilities at fair value — non-qualifying hedges | (102.3 | ) | – | (46.8 | ) | (55.5 | ) | (102.3 | ) | ||||||||||||||
Derivative liabilities at fair value qualifying hedges | (0.3 | ) | – | (0.3 | ) | – | (0.3 | ) | |||||||||||||||
Borrowings(4) | (16,520.5 | ) | – | (15,792.3 | ) | (1,191.6 | ) | (16,983.9 | ) | ||||||||||||||
Credit balances of factoring clients | (1,344.0 | ) | – | – | (1,344.0 | ) | (1,344.0 | ) | |||||||||||||||
Other liabilities subject to fair value disclosure(5) | (789.0 | ) | – | – | (789.0 | ) | (789.0 | ) |
(1) | Level 3 estimated fair value at December 31, 2016, includes debt securities AFS ($485.5 million), debt securities carried at fair value with changes recorded in net income ($283.5 million), non-marketable investments ($256.4 million), and debt securities HTM ($68.8 million). Level 3 estimated fair value at December 31, 2015, includes debt securities AFS ($567.1 million), debt securities carried at fair value with changes recorded in net income ($339.7 million), non-marketable investments ($291.8 million), and debt securities HTM ($66.3 million). |
(2) | The indemnification assets included in the above table do not include Agency claims indemnification ($108.0 million and $65.6 million at December 31, 2016 and 2015, respectively), as they are not considered financial instruments. |
(3) | Other assets subject to fair value disclosure primarily include accrued interest receivable and miscellaneous receivables. These assets have carrying values that approximate fair value generally due to the short-term nature and are classified as Level 3. The unsecured counterparty receivables primarily consist of amounts owed to CIT from GSI for debt discount, return of collateral posted to GSI and settlements resulting from market value changes to asset-backed securities underlying the Dutch TRS. |
(4) | Deposits and borrowings include accrued interest, which is included in “Other liabilities” in the Balance Sheet. |
(5) | Other liabilities subject to fair value disclosure include accounts payable, accrued liabilities, customer security and maintenance deposits and miscellaneous liabilities. The fair value of these approximate carrying value and are classified as level 3. |
- | Commercial and Consumer Loans — Of the loan balance above, approximately $0.4 billion at December 31, 2016 and $1.0 billion at December 31, 2015, was valued using Level 2 inputs. As there is no liquid secondary market for the other loans in the Company’s portfolio, the fair value is estimated based on discounted cash flow analyses which use Level 3 inputs at both December 31, 2016 and December 31, 2015. In addition to the characteristics of the underlying contracts, key inputs to the analysis include interest rates, prepayment rates, and credit spreads. For the commercial loan portfolio, the market based credit spread inputs are derived from instruments with comparable credit risk characteristics obtained from independent third party vendors. As these Level 3 unobservable inputs are specific to individual loans / collateral types, management does not believe that sensitivity analysis of individual inputs is meaningful, but rather that sensitivity is more meaningfully assessed through the evaluation of aggregate carrying values of the loans. The fair value of loans at December 31, 2016 was $26.8 billion, which was 100.6% of carrying value. The fair value of loans at December 31, 2015 was $26.9 billion, which was 97.4% of carrying value. |
- | Impaired Loans — The value of impaired loans is estimated using the fair value of collateral (on an orderly liquidation basis) if the loan is collateralized, the present value of expected cash flows utilizing the current market rate for such loan, or observable market price. As these Level 3 unobservable inputs are specific to individual loans / collateral types, management does not believe that sensitivity analysis of individual inputs is meaningful, but rather that sensitivity is more meaningfully assessed through the evaluation of aggregate carrying values of impaired loans relative to contractual amounts owed (unpaid principal balance or “UPB”) from customers. As of December 31, 2016, the UPB related to impaired loans including loans for which the Company was applying the income recognition and disclosure guidance in ASC 310-30 (Loans and Debt Securities Acquired with Deteriorated Credit Quality), totaled $244.3 million. Including related allowances, these loans are carried at $188.2 million, or 77.0% of UPB. Of these amounts, $74.7 million and $55.5 million of UPB and carrying value, respectively, relate to loans with no specific allowance. As of December 31, 2015 the UPB related to impaired loans, including loans for which the Company was applying the income recognition and disclosure guidance in ASC 310-30 (Loans and Debt Securities Acquired with Deteriorated Credit Quality), totaled $157.2 million and including related allowances, these loans were carried at $106.9 million, or 68.0% of UPB. Of these amounts, $33.3 million and $22.0 million of UPB and carrying value relate to loans with no specific allowance. The difference between UPB and carrying value reflects cumulative charge-offs on accounts remaining in process of collection, FSA discounts and allowances. SeeNote 3 — Loans for more information. |
- | PCI loans — These loans are valued by grouping the loans into performing and non-performing groups and stratifying the loans based on common risk characteristics such as product type, FICO score and other economic attributes. Due to a lack of observable market data, the estimated fair value of these loan portfolios was based on an internal model using unobservable inputs, including discount rates, prepayment rates, delinquency roll-rates, and loss severities. Due to the |
significance of the unobservable inputs, these instruments are classified as Level 3. |
- | Jumbo Mortgage Loans — The estimated fair value was determined by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Due to the unobservable nature of the inputs used in deriving the estimated fair value of these instruments, these loans are classified as Level 3. |
- | Unsecured debt — Approximately $10.6 billion par value at December 31, 2016 and $10.7 billion par value at December 31, 2015 were valued using market inputs, which are Level 2 inputs. |
- | Secured Borrowings — Approximately $3.3 billion par value at December 31, 2016 and $4.6 billion par value at December 31, 2015 were valued using market inputs, which are Level 2 inputs. Where market estimates were not available for approximately $1.1 billion and $1.2 billion par value at December 31, 2016 and December 31, 2015, respectively, values were estimated using a discounted cash flow analysis with a discount rate approximating current market rates for issuances by CIT of similar debt, which are Level 3 inputs. Included in the above, the estimated fair value of FHLB Advances is based on a discounted cash flow model that utilizes benchmark interest rates and other observable market inputs. The discounted cash flow model uses the contractual advance features to determine the cash flows with a zero spread to the forward FHLB curve, which are discounted using observable benchmark interest rates. As the model inputs can be observed in a liquid market and the model does not require significant judgment, FHLB advances are classified as Level 2. |
Issued | Less Treasury | Outstanding | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Common Stock – December 31, 2015 | 204,447,769 | (3,426,261 | ) | 201,021,508 | ||||||||||
Restricted stock issued | 1,662,119 | – | 1,662,119 | |||||||||||
Shares held to cover taxes on vesting restricted shares and other | – | (668,280 | ) | (668,280 | ) | |||||||||
Employee stock purchase plan participation | 72,325 | – | 72,325 | |||||||||||
Common Stock – December 31, 2016 | 206,182,213 | (4,094,541 | ) | 202,087,672 |
December 31, 2016 | December 31, 2015 | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gross Unrealized | Income Taxes | Net Unrealized | Gross Unrealized | Income Taxes | Net Unrealized | ||||||||||||||||||||||
Foreign currency translation adjustments | $ | (28.6 | ) | $ | (32.8 | ) | $ | (61.4 | ) | $ | (29.8 | ) | $ | (35.9 | ) | $ | (65.7 | ) | |||||||||
Changes in benefit plan net gain (loss) and prior service (cost)/credit | (70.6 | ) | 5.3 | (65.3 | ) | (76.3 | ) | 7.0 | (69.3 | ) | |||||||||||||||||
Unrealized net gains (losses) on available for sale securities | (22.0 | ) | 8.6 | (13.4 | ) | (11.4 | ) | 4.3 | (7.1 | ) | |||||||||||||||||
Total accumulated other comprehensive loss | $ | (121.2 | ) | $ | (18.9 | ) | $ | (140.1 | ) | $ | (117.5 | ) | $ | (24.6 | ) | $ | (142.1 | ) |
Foreign currency translation adjustments | Changes in benefit plan net gain (loss) and prior service (cost) credit | Unrealized net gains (losses) on available for sale securities | Total AOCI | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance as of December 31, 2015 | $ | (65.7 | ) | $ | (69.3 | ) | $ | (7.1 | ) | $ | (142.1 | ) | |||||||
AOCI activity before reclassifications | (0.4 | ) | 2.4 | (6.3 | ) | (4.3 | ) | ||||||||||||
Amounts reclassified from AOCI | 4.7 | 1.6 | – | 6.3 | |||||||||||||||
Net current period AOCI | 4.3 | 4.0 | (6.3 | ) | 2.0 | ||||||||||||||
Balance as of December 31, 2016 | $ | (61.4 | ) | $ | (65.3 | ) | $ | (13.4 | ) | $ | (140.1 | ) | |||||||
Balance as of December 31, 2014 | $ | (75.4 | ) | $ | (58.5 | ) | $ | – | $ | (133.9 | ) | ||||||||
AOCI activity before reclassifications | (70.8 | ) | (12.8 | ) | (7.1 | ) | (90.7 | ) | |||||||||||
Amounts reclassified from AOCI | 80.5 | 2.0 | – | 82.5 | |||||||||||||||
Net current period AOCI | 9.7 | (10.8 | ) | (7.1 | ) | (8.2 | ) | ||||||||||||
Balance as of December 31, 2015 | $ | (65.7 | ) | $ | (69.3 | ) | $ | (7.1 | ) | $ | (142.1 | ) |
Years Ended December 31, | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | |||||||||||||||||||||||||||||
Gross Amount | Tax | Net Amount | Gross Amount | Tax | Net Amount | Affected Income Statement line item | ||||||||||||||||||||||||
Foreign currency translation adjustments gains (losses) | $ | 3.5 | $ | 1.2 | $ | 4.7 | $ | 73.4 | $ | 7.1 | $ | 80.5 | Other Income | |||||||||||||||||
Changes in benefit plan net gain/(loss) and prior service (cost)/credit gains (losses) | 1.8 | (0.2 | ) | 1.6 | 2.3 | (0.3 | ) | 2.0 | Operating Expenses | |||||||||||||||||||||
Total Reclassifications out of AOCI | $ | 5.3 | $ | 1.0 | $ | 6.3 | $ | 75.7 | $ | 6.8 | $ | 82.5 |
CIT | CIT Bank, N.A. | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Tier 1 Capital | December 31, 2016 | December 31, 2015 | December 31, 2016 | December 31, 2015 | |||||||||||||||
Total common stockholders’ equity(1) | $ | 10,002.7 | $ | 10,944.7 | $ | 5,187.8 | $ | 5,582.2 | |||||||||||
Effect of certain items in accumulated other comprehensive loss excluded from Tier 1 Capital and qualifying noncontrolling interests | 79.1 | 76.9 | 13.4 | 7.0 | |||||||||||||||
Adjusted total equity | 10,081.8 | 11,021.6 | 5,201.2 | 5,589.2 | |||||||||||||||
Less: Goodwill(2)(3) | (733.1 | ) | (1,130.8 | ) | (490.9 | ) | (830.8 | ) | |||||||||||
Disallowed deferred tax assets | (213.7 | ) | (908.3 | ) | – | – | |||||||||||||
Disallowed intangible assets(2)(3) | (68.3 | ) | (53.6 | ) | (84.9 | ) | (58.4 | ) | |||||||||||
Other Tier 1 components(4)(5) | (7.8 | ) | (0.1 | ) | (2.2 | ) | – | ||||||||||||
Common Equity Tier 1 Capital | 9,058.9 | 8,928.8 | 4,623.2 | 4,700.0 | |||||||||||||||
Tier 1 Capital | 9,058.9 | 8,928.8 | 4,623.2 | 4,700.0 | |||||||||||||||
Tier 2 Capital | |||||||||||||||||||
Qualifying allowance for credit losses and other reserves(6) | 476.3 | 403.3 | 430.2 | 374.7 | |||||||||||||||
Total qualifying capital | $ | 9,535.2 | $ | 9,332.1 | $ | 5,053.4 | $ | 5,074.7 | |||||||||||
Risk-weighted assets | $ | 64,586.3 | $ | 69,552.3 | $ | 34,410.3 | $ | 36,807.2 | |||||||||||
Common Equity Tier 1 Capital (to risk-weighted assets): | |||||||||||||||||||
Actual | 14.0 | % | 12.8 | % | 13.4 | % | 12.8 | % | |||||||||||
Effective minimum ratios under Basel III guidelines(7) | 5.125 | % | 4.5 | % | 5.125 | % | 4.5 | % | |||||||||||
Tier 1 Capital (to risk-weighted assets): | |||||||||||||||||||
Actual | 14.0 | % | 12.8 | % | 13.4 | % | 12.8 | % | |||||||||||
Effective minimum ratios under Basel III guidelines(7) | 6.625 | % | 6.0 | % | 6.625 | % | 6.0 | % | |||||||||||
Total Capital (to risk-weighted assets): | |||||||||||||||||||
Actual | 14.8 | % | 13.4 | % | 14.7 | % | 13.8 | % | |||||||||||
Effective minimum ratios under Basel III guidelines(7) | 8.625 | % | 8.0 | % | 8.625 | % | 8.0 | % | |||||||||||
Tier 1 Leverage Ratio: | |||||||||||||||||||
Actual | 13.9 | % | 13.4 | % | 10.9 | % | 10.9 | % | |||||||||||
Required minimum ratio for capital adequacy purposes | 4.0 | % | 4.0 | % | 4.0 | % | 4.0 | % |
(1) | See Consolidated Balance Sheets for the components of Total stockholders’ equity. |
(2) | Goodwill and disallowed intangible assets adjustments also reflect the portion included within assets of discontinued operations. |
(3) | Goodwill and disallowed intangible assets adjustments include the respective portion of deferred tax liability in accordance with guidelines under Basel III. |
(4) | The December 31, 2016 amount represents the Volcker Rule requirement of deducting covered funds from equity. This requirement was first implemented in the second quarter of 2016. The December 31, 2015 amount Includes the Tier 1 capital charge for nonfinancial equity instruments under Basel I. |
(5) | Other Tier 1 components include excess cost over fair market value on available-for-sale equity securities with readily determinable fair values. |
(6) | “Other reserves” represents additional credit loss reserves for unfunded lending commitments, letters of credit, and deferred purchase agreements, all of which are recorded in Other Liabilities. |
(7) | Required ratios under Basel III Final Rule in effect as of the reporting date including the partially phased-in capital conservation buffer. |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(dollars in millions, except per share amounts; shares in thousands) | 2016 | 2015 | 2014 | ||||||||||||
Earnings / (Loss) | |||||||||||||||
(Loss) income from continuing operations | $ | (182.6 | ) | $ | 724.1 | $ | 675.7 | ||||||||
(Loss) income from discontinued operations | (665.4 | ) | 310.0 | 443.4 | |||||||||||
Net (loss) income | $ | (848.0 | ) | $ | 1,034.1 | $ | 1,119.1 | ||||||||
Weighted Average Common Shares Outstanding | |||||||||||||||
Basic shares outstanding | 201,850 | 185,500 | 188,491 | ||||||||||||
Stock-based awards(1)(2) | – | 888 | 972 | ||||||||||||
Diluted shares outstanding | 201,850 | 186,388 | 189,463 | ||||||||||||
Basic Earnings Per Common Share Data | |||||||||||||||
(Loss) income from continuing operations | $ | (0.90 | ) | $ | 3.90 | $ | 3.59 | ||||||||
(Loss) income from discontinued operation | $ | (3.30 | ) | $ | 1.67 | $ | 2.35 | ||||||||
Basic (loss) income per common share | $ | (4.20 | ) | $ | 5.57 | $ | 5.94 | ||||||||
Diluted Earnings Per Common Share Data(2) | |||||||||||||||
(Loss) income from continuing operations | $ | (0.90 | ) | $ | 3.89 | $ | 3.57 | ||||||||
(Loss) income from discontinued operation | $ | (3.30 | ) | $ | 1.66 | $ | 2.34 | ||||||||
Diluted (loss) income per common share | $ | (4.20 | ) | $ | 5.55 | $ | 5.91 |
(1) | Represents the incremental shares from in-the-money non-qualified restricted stock awards, performance shares, and stock options. Weighted average restricted shares, performance shares and options that were either out-of-the money or did not meet performance targets and therefore excluded from diluted earnings per share totaled 2.7 million, 2.0 million, and 1.3 million for the years ended December 31, 2016, 2015 and 2014, respectively. |
(2) | Due to the net loss for the year ended December 31, 2016, the Diluted Earnings Per Share calculation excluded 0.7 million of weighted average restricted shares, performance shares, and options as they were anti-dilutive. The Basic weighted average shares outstanding and net loss for the year ended December 31, 2016 were utilized for the Diluted Earnings Per Share calculation. |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Rental income on operating leases | $ | 1,031.6 | $ | 1,018.1 | $ | 949.6 | |||||||||
Other Income: | |||||||||||||||
Fee revenues | 111.6 | 105.7 | 92.4 | ||||||||||||
Factoring commissions | 105.0 | 116.5 | 120.2 | ||||||||||||
Net gains (losses) on derivatives and foreign currency exchange | 55.9 | (37.9 | ) | (51.8 | ) | ||||||||||
Gains on sales of leasing equipment | 51.1 | 57.0 | 59.6 | ||||||||||||
Gains on investments | 34.6 | 0.9 | 38.3 | ||||||||||||
Gains (losses) on loan and portfolio sales | 34.2 | (47.2 | ) | 34.3 | |||||||||||
Gains (losses) on OREO sales | 10.2 | (5.4 | ) | – | |||||||||||
Impairment on assets held for sale | (36.6 | ) | (55.9 | ) | (81.2 | ) | |||||||||
Termination fees on Canadian total return swap | (280.8 | ) | – | – | |||||||||||
Other revenues | 65.4 | 15.9 | 52.1 | ||||||||||||
Total other income | 150.6 | 149.6 | 263.9 | ||||||||||||
Total non-interest income | $ | 1,182.2 | $ | 1,167.7 | $ | 1,213.5 |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Depreciation on operating lease equipment | $ | (261.1 | ) | $ | (229.2 | ) | $ | (229.8 | ) | ||||||
Maintenance and other operating lease expenses | (213.6 | ) | (185.1 | ) | (171.7 | ) | |||||||||
Operating expenses: | |||||||||||||||
Compensation and benefits | (585.5 | ) | (549.6 | ) | (495.1 | ) | |||||||||
Professional fees | (175.8 | ) | (135.0 | ) | (75.3 | ) | |||||||||
Technology | (133.7 | ) | (109.2 | ) | (84.5 | ) | |||||||||
Insurance | (96.5 | ) | (61.6 | ) | (45.3 | ) | |||||||||
Net occupancy expense | (71.9 | ) | (49.1 | ) | (33.7 | ) | |||||||||
Advertising and marketing | (20.5 | ) | (30.4 | ) | (33.2 | ) | |||||||||
Other | (137.8 | ) | (114.6 | ) | (100.2 | ) | |||||||||
Operating expenses, excluding restructuring costs and intangible asset amortization | (1,221.7 | ) | (1,049.5 | ) | (867.3 | ) | |||||||||
Intangible assets amortization | (25.6 | ) | (13.3 | ) | (1.4 | ) | |||||||||
Provision for severance and facilities exiting activities | (36.2 | ) | (58.3 | ) | (31.4 | ) | |||||||||
Total operating expenses | (1,283.5 | ) | (1,121.1 | ) | (900.1 | ) | |||||||||
Goodwill impairment | (354.2 | ) | – | – | |||||||||||
Loss on debt extinguishments and deposit redemptions | (12.5 | ) | (1.5 | ) | (3.5 | ) | |||||||||
Total non-interest expenses | $ | (2,124.9 | ) | $ | (1,536.9 | ) | $ | (1,305.1 | ) |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
U.S. operations | $ | 157.5 | $ | 227.6 | $ | 270.3 | |||||||||
Non-U.S. operations | (136.6 | ) | (41.6 | ) | (25.8 | ) | |||||||||
Income from continuing operations before benefit / (provision) for income taxes | $ | 20.9 | $ | 186.0 | $ | 244.5 |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Current U.S. federal income tax provision | $ | 0.3 | $ | 0.3 | $ | 0.9 | |||||||||
Deferred U.S. federal income tax provision / (benefit) | 906.9 | (566.3 | ) | (412.4 | ) | ||||||||||
Total federal income tax (benefit) / provision | 907.2 | (566.0 | ) | (411.5 | ) | ||||||||||
Current state and local income tax provision | 14.6 | 5.8 | 6.9 | ||||||||||||
Deferred state and local income tax (benefit) / provision | 1.8 | (21.0 | ) | 2.0 | |||||||||||
Total state and local income tax (benefit) / provision | 16.4 | (15.2 | ) | 8.9 | |||||||||||
Total non-U.S. income tax provision | 90.8 | 82.4 | 1.2 | ||||||||||||
Total (benefit) / provision for income taxes | $ | 1,014.4 | $ | (498.8 | ) | $ | (401.4 | ) | |||||||
Continuing operations | $ | 203.5 | $ | (538.0 | ) | $ | (432.4 | ) | |||||||
Discontinued operations | 810.9 | 39.2 | 31.0 | ||||||||||||
Total (benefit) / provision for income taxes | $ | 1,014.4 | $ | (498.8 | ) | $ | (401.4 | ) |
Effective Tax Rate | |||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||
Continuing Operations | Pretax Income | Income tax expense (benefit) | Percent of pretax income | Pretax Income | Income tax expense (benefit) | Percent of pretax Income | Pretax Income | Income tax expense (benefit) | Percent of pretax income | ||||||||||||||||||||||||||||||
Federal income tax rate | $ | 20.9 | $ | 7.3 | 35.0 | % | $ | 186.0 | $ | 65.1 | 35.0 | % | $ | 244.5 | $ | 85.6 | 35.0 | % | |||||||||||||||||||||
Increase (decrease) due to: | |||||||||||||||||||||||||||||||||||||||
State and local income taxes, net of federal income tax benefit | – | 21.0 | 101.0 | – | (10.8 | ) | (5.9 | ) | – | 6.3 | 2.6 | ||||||||||||||||||||||||||||
Non-deductible goodwill | – | 126.2 | 606.6 | – | 8.3 | 4.5 | – | – | – | ||||||||||||||||||||||||||||||
Domestic tax credits | – | (18.1 | ) | (87.0 | ) | – | (7.5 | ) | (4.0 | ) | – | – | – | ||||||||||||||||||||||||||
Lower tax rates applicable to non-U.S. earnings | – | (10.3 | ) | (49.6 | ) | – | 0.6 | 0.3 | – | (15.9 | ) | (6.5 | ) | ||||||||||||||||||||||||||
International income subject to U.S. tax | – | 29.2 | 140.3 | – | 42.1 | 22.6 | – | 33.1 | 13.5 | ||||||||||||||||||||||||||||||
Unrecognized tax expense (benefit) | – | (14.4 | ) | 69.3 | – | 4.5 | 2.4 | – | (269.2 | ) | (110.1 | ) | |||||||||||||||||||||||||||
Deferred income taxes on international unremitted earnings | – | 41.8 | 200.7 | – | 30.2 | 16.2 | – | (7.9 | ) | (3.2 | ) | ||||||||||||||||||||||||||||
Valuation allowances | – | 14.7 | 70.6 | – | (693.8 | ) | (373.0 | ) | – | (264.8 | ) | (108.3 | ) | ||||||||||||||||||||||||||
International tax settlements | – | (0.6 | ) | (2.7 | ) | – | (3.5 | ) | (1.9 | ) | – | (1.1 | ) | (0.5 | ) | ||||||||||||||||||||||||
Other | – | 6.7 | 32.4 | – | 26.8 | 14.6 | – | 1.5 | 0.7 | ||||||||||||||||||||||||||||||
Effective Tax Rate — Continuing operations | $ | 203.5 | 978.0 | % | $ | (538.0 | ) | (289.2 | )% | $ | (432.4 | ) | (176.8 | )% | |||||||||||||||||||||||||
Discontinued Operation | |||||||||||||||||||||||||||||||||||||||
Federal income tax rate | $ | 145.5 | $ | 50.9 | 35.0 | % | $ | 349.2 | $ | 122.2 | 35.0 | % | $ | 474.4 | $ | 166.0 | 35.0 | % | |||||||||||||||||||||
Increase (decrease) due to: | |||||||||||||||||||||||||||||||||||||||
State and local income taxes, net of federal income tax benefit | – | (9.5 | ) | (6.5 | ) | – | 0.6 | 0.2 | – | 2.6 | 0.6 | ||||||||||||||||||||||||||||
Non-deductible penalties | – | 16.6 | 11.4 | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
Lower tax rates applicable to non-U.S. earnings | – | (110.8 | ) | (76.1 | ) | – | (89.3 | ) | (25.6 | ) | – | (82.3 | ) | (17.3 | ) | ||||||||||||||||||||||||
International income subject to U.S. tax | – | 16.7 | 11.5 | – | 8.1 | 2.3 | – | 10.3 | 2.2 | ||||||||||||||||||||||||||||||
Deferred income taxes on international unremitted earnings | 847.3 | 582.1 | – | – | – | – | |||||||||||||||||||||||||||||||||
Valuation Allowances | – | – | – | – | – | – | – | (64.0 | ) | (13.5 | ) | ||||||||||||||||||||||||||||
Other | – | (0.3 | ) | (0.3 | ) | – | (2.4 | ) | (0.7 | ) | – | (1.6 | ) | (0.5 | ) | ||||||||||||||||||||||||
Effective Tax Rate — Discontinued operation | $ | 810.9 | 557.1 | % | $ | 39.2 | 11.2 | % | $ | 31.0 | 6.5 | % | |||||||||||||||||||||||||||
Total Effective Tax Rate | $ | 1,014.4 | 609.7 | % | $ | (498.8 | ) | (93.2 | )% | $ | (401.4 | ) | (55.8 | )% |
December 31, | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | ||||||||||
Deferred Tax Assets: | |||||||||||
Net operating loss (NOL) carry forwards | $ | 2,528.3 | $ | 2,414.8 | |||||||
Basis difference in loans | 281.4 | 291.6 | |||||||||
Provision for credit losses | 185.7 | 164.3 | |||||||||
Accrued liabilities and reserves | 274.9 | 196.5 | |||||||||
FSA adjustments — aircraft and rail contracts | 24.2 | 27.1 | |||||||||
Deferred stock-based compensation | 34.5 | 46.1 | |||||||||
Domestic tax credits | 40.5 | 14.5 | |||||||||
Other | 79.1 | 96.0 | |||||||||
Total gross deferred tax assets | 3,448.6 | 3,250.9 | |||||||||
Deferred Tax Liabilities: | |||||||||||
Operating leases | (1,818.5 | ) | (1,486.5 | ) | |||||||
Loans and direct financing leases | (100.3 | ) | 13.3 | ||||||||
Basis difference in mortgage backed securities | (100.0 | ) | (145.4 | ) | |||||||
Basis difference in federal home loan bank stock | (28.1 | ) | (33.0 | ) | |||||||
Non-U.S. unremitted earnings | (1,032.6 | ) | (145.9 | ) | |||||||
Unrealized foreign exchange gains | (27.7 | ) | (47.3 | ) | |||||||
Goodwill and intangibles | (116.7 | ) | (123.8 | ) | |||||||
Other | (21.6 | ) | (35.0 | ) | |||||||
Total deferred tax liabilities | (3,245.5 | ) | (2,003.6 | ) | |||||||
Total net deferred tax asset before valuation allowances | 203.1 | 1,247.3 | |||||||||
Less: Valuation allowances | (278.4 | ) | (340.8 | ) | |||||||
Net deferred tax asset (liability) after valuation allowances | $ | (75.3 | ) | $ | 906.5 |
- | Taxable income in carryback years, |
- | Future reversals of existing taxable temporary differences (deferred tax liabilities), |
- | Prudent and feasible tax planning strategies, and |
- | Future taxable income forecasts. |
- | The U.S. group transitioned into a 3-year (12 quarter) cumulative normalized income position in the third quarter of 2014, resulting in the Company’s ability to significantly increase the reliance on future taxable income forecasts. |
- | Management’s long-term forecast of future U.S. taxable income supporting partial utilization of the U.S. federal NOLs prior to their expiration, and |
- | U.S. federal NOLs not expiring until 2027 through 2033. |
- | Certain separate U.S. state filing entities remaining in a three year cumulative loss, and |
- | State NOLs expiration periods varying in time. |
Liabilities for Unrecognized Tax Benefits | Interest / Penalties | Grand Total | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance at December 31, 2015 | $ | 46.7 | $ | 18.0 | $ | 64.7 | ||||||||
Additions for tax positions related to current years | 2.7 | 0.8 | 3.5 | |||||||||||
Additions for tax positions related to prior years | 0.9 | 1.7 | 2.6 | |||||||||||
Reductions for tax positions of prior years | (8.2 | ) | (7.6 | ) | (15.8 | ) | ||||||||
Income Tax Audit Settlements | (4.0 | ) | (0.6 | ) | (4.6 | ) | ||||||||
Expiration of statutes of limitations | (2.0 | ) | (0.8 | ) | (2.8 | ) | ||||||||
Foreign currency revaluation | 0.3 | 0.2 | 0.5 | |||||||||||
Balance at December 31, 2016 | $ | 36.4 | $ | 11.7 | $ | 48.1 |
December 31, 2017.
December 31, 2012 and December 31, 2013, respectively. The audit settlement resulted in no additional regular or alternative minimum tax liability but resulted in a significant cash tax refund, which was reflected in the acquisition date balance sheet.
Retirement Benefits | Post-Retirement Benefits | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Change in benefit obligation | |||||||||||||||||||
Benefit obligation at beginning of year | $ | 445.5 | $ | 463.6 | $ | 35.1 | $ | 38.6 | |||||||||||
Service cost | 0.1 | 0.2 | – | – | |||||||||||||||
Interest cost | 17.1 | 16.9 | 1.4 | 1.4 | |||||||||||||||
Plan amendments, curtailments, and settlements | (1.8 | ) | (2.4 | ) | – | – | |||||||||||||
Actuarial (gain) / loss | 4.7 | (10.9 | ) | 0.2 | (1.6 | ) | |||||||||||||
Benefits paid | (21.8 | ) | (21.3 | ) | (3.6 | ) | (4.9 | ) | |||||||||||
Other(1) | (0.2 | ) | (0.6 | ) | 2.1 | 1.6 | |||||||||||||
Benefit obligation at end of year | 443.6 | 445.5 | 35.2 | 35.1 | |||||||||||||||
Change in plan assets | |||||||||||||||||||
Fair value of plan assets at beginning of period | 337.9 | 359.9 | – | – | |||||||||||||||
Actual return on plan assets | 28.2 | (12.3 | ) | – | – | ||||||||||||||
Employer contributions | 13.2 | 12.8 | 1.5 | 3.3 | |||||||||||||||
Plan settlements | (1.8 | ) | (1.1 | ) | – | – | |||||||||||||
Benefits paid | (21.8 | ) | (21.3 | ) | (3.6 | ) | (4.9 | ) | |||||||||||
Other(1) | (0.2 | ) | (0.1 | ) | 2.1 | 1.6 | |||||||||||||
Fair value of plan assets at end of period | 355.5 | 337.9 | – | – | |||||||||||||||
Funded status at end of year(2)(3) | $ | (88.1 | ) | $ | (107.6 | ) | $ | (35.2 | ) | $ | (35.1 | ) |
(1) | Consists of the following: plan participants’ contributions and currency translation adjustments. |
(2) | These amounts were recognized as liabilities in the Consolidated Balance Sheet at December 31, 2016 and 2015. |
(3) | Company assets of $86.1 million and $85.9 million as of December 31, 2016 and December 31, 2015, respectively, related to the non-qualified U.S. executive retirement plan obligation are not included in plan assets but related liabilities are in the benefit obligation. |
December 31, | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | ||||||||||
Projected benefit obligation | $ | 437.4 | $ | 439.3 | |||||||
Accumulated benefit obligation | 437.4 | 439.3 | |||||||||
Fair value of plan assets | 349.3 | 331.7 |
Retirement Benefits | Post-Retirement Benefits | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||||||||||||
Service cost | $ | 0.1 | $ | 0.2 | $ | 0.2 | $ | – | $ | – | $ | – | |||||||||||||||
Interest cost | 17.1 | 16.9 | 20.2 | 1.4 | 1.4 | 1.6 | |||||||||||||||||||||
Expected return on plan assets | (18.5 | ) | (20.1 | ) | (20.8 | ) | – | – | – | ||||||||||||||||||
Amortization of prior service cost | – | – | – | (0.5 | ) | (0.5 | ) | (0.5 | ) | ||||||||||||||||||
Amortization of net loss/(gain) | 2.9 | 2.6 | 7.5 | (0.7 | ) | (0.3 | ) | (0.7 | ) | ||||||||||||||||||
Settlement and curtailment (gain)/loss | – | – | 2.9 | – | – | – | |||||||||||||||||||||
Net periodic benefit cost (credit) | 1.6 | (0.4 | ) | 10.0 | 0.2 | 0.6 | 0.4 | ||||||||||||||||||||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income | |||||||||||||||||||||||||||
Net loss/(gain) | (5.0 | ) | 20.9 | 42.6 | 0.9 | (1.5 | ) | 1.0 | |||||||||||||||||||
Amortization, settlement or curtailment recognition of net (loss)/gain | (2.9 | ) | (2.6 | ) | (10.4 | ) | 0.7 | 0.3 | 0.7 | ||||||||||||||||||
Amortization, settlement or curtailment recognition of prior service credit | – | – | – | 0.5 | 0.5 | 0.5 | |||||||||||||||||||||
Total recognized in OCI | (7.9 | ) | 18.3 | 32.2 | 2.1 | (0.7 | ) | 2.2 | |||||||||||||||||||
Total recognized in net periodic benefit cost and OCI | $ | (6.3 | ) | $ | 17.9 | $ | 42.2 | $ | 2.3 | $ | (0.1 | ) | $ | 2.6 |
U.S. asset gains of $7.7 million. The postretirement AOCI net losses (before taxes) of $2.2 million during the year ended December 31, 2014 were primarily driven by a 75 basis point decrease in the U.S. postretirement plan discount rate from 4.50% at December 31, 2013 to 3.75% at December 31, 2014.
Retirement Benefits | Post-Retirement Benefits | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Discount rate | 3.73 | % | 3.97 | % | 3.75 | % | 3.99 | % | |||||||||||
Rate of compensation increases | – | – | (1 | ) | (1 | ) | |||||||||||||
Health care cost trend rate | |||||||||||||||||||
Pre-65 | (1 | ) | (1 | ) | 6.50 | % | 6.70 | % | |||||||||||
Post-65 | (1 | ) | (1 | ) | 7.80 | % | 8.20 | % | |||||||||||
Ultimate health care cost trend rate | (1 | ) | (1 | ) | 4.50 | % | 4.50 | % | |||||||||||
Year ultimate reached | (1 | ) | (1 | ) | 2037 | 2037 |
Retirement Benefits | Post-Retirement Benefits | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Discount rate | 3.97 | % | 3.74 | % | 3.99 | % | 3.74 | % | |||||||||||
Expected long-term return on plan assets | 5.68 | % | 5.75 | % | (1 | ) | (1 | ) | |||||||||||
Rate of compensation increases | 0.00 | % | 0.09 | % | (1 | ) | (1 | ) |
(1) | Not applicable |
December 31, 2016 | Level 1 | Level 2 | Level 3 | Not Classified1 | Total Fair Value | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Cash | $ | 5.8 | $ | – | $ | – | $ | – | $ | 5.8 | ||||||||||||
Mutual Fund | 69.9 | – | – | – | 69.9 | |||||||||||||||||
Exchange Traded Funds | 26.1 | – | – | – | 26.1 | |||||||||||||||||
Common Stock | 16.0 | – | – | – | 16.0 | |||||||||||||||||
Short Term Investment Fund, measured at NAV | 1.4 | – | – | – | 1.4 | |||||||||||||||||
Insurance Contracts, measured at NAV | – | – | 6.1 | – | 6.1 | |||||||||||||||||
Common Collective Trust, measured at NAV | – | – | – | 195.2 | 195.2 | |||||||||||||||||
Partnership, measured at NAV | – | – | – | 8.6 | 8.6 | |||||||||||||||||
Hedge Fund, measured at NAV | – | – | – | 26.4 | 26.4 | |||||||||||||||||
$ | 119.2 | $ | – | $ | 6.1 | $ | 230.2 | $ | 355.5 | |||||||||||||
December 31, 2015 | ||||||||||||||||||||||
Cash | $ | 1.7 | $ | – | $ | – | $ | – | $ | 1.7 | ||||||||||||
Mutual Fund | 67.9 | – | – | – | 67.9 | |||||||||||||||||
Exchange Traded Funds | 24.6 | – | – | – | 24.6 | |||||||||||||||||
Common Stock | 19.7 | – | – | – | 19.7 | |||||||||||||||||
Short Term Investment Fund, measured at NAV | 1.7 | – | – | – | 1.7 | |||||||||||||||||
Insurance Contracts, measured at NAV | – | – | 6.2 | – | 6.2 | |||||||||||||||||
Common Collective Trust, measured at NAV | – | – | – | 183.1 | 183.1 | |||||||||||||||||
Partnership, measured at NAV | – | – | – | 7.7 | 7.7 | |||||||||||||||||
Hedge Fund, measured at NAV | – | – | – | 25.3 | 25.3 | |||||||||||||||||
$ | 115.6 | $ | – | $ | 6.2 | $ | 216.1 | $ | 337.9 |
(1) | These investments have been measured using the net asset value per share practical expedient and are not required to be classified in the table above, in accordance with ASU 2015-07. |
Insurance Contracts | ||||||
---|---|---|---|---|---|---|
December 31, 2015 | $ | 6.2 | ||||
Realized and Unrealized losses | (0.1 | ) | ||||
December 31, 2016 | $ | 6.1 | ||||
Change in Unrealized Losses for investments still held at December 31, 2016 | $ | (0.1 | ) |
For the years ended December 31, | Retirement Benefits | Gross Postretirement Benefits | Medicare Subsidy Receipts | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2017 | $ | 26.2 | $ | 3.0 | $ | 0.3 | ||||||||
2018 | 26.4 | 3.0 | 0.3 | |||||||||||
2019 | 26.5 | 2.9 | 0.3 | |||||||||||
2020 | 28.5 | 2.8 | 0.3 | |||||||||||
2021 | 28.2 | 2.7 | 0.3 | |||||||||||
2022 – 2026 | 137.4 | 11.9 | 0.8 |
150% of target based on performance against two pre-established performance measures: fully diluted EPS (weighted 75%) and pre-tax ROA (weighted 25%). The second form of 2015 PSUs, “2015 PSUs-PreTax ROTCE,” are earned in each year during a three-year performance period (2015 – 2017) from 0% to a maximum of 150% of target based on pre-tax ROTCE as follows: (1) one-third based on the pre-tax ROTCE for the first year of the performance period; (2) one-third based on the average pre-tax ROTCE for the first two years of the performance period; and (3) one-third based on the three-year average ROTCE during the performance period. Performance measures for all PSU awards have a minimum threshold level of performance that must be achieved to trigger any payout; if the threshold level of performance is not achieved, then no portion of the PSU target will be payable.
Stock-Settled Awards | Cash-Settled Awards | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2016 | Number of Shares | Weighted Average Grant Date Value | Number of Shares | Weighted Average Grant Date Value | |||||||||||||||
Unvested at beginning of period | 3,384,297 | $ | 45.55 | 9,623 | $ | 44.97 | |||||||||||||
Vested / unsettled awards at beginning of period | 39,626 | 40.46 | – | – | |||||||||||||||
PSUs — granted to employees | 284,640 | 32.80 | – | – | |||||||||||||||
PSUs — incremental for performance above 2012-14 targets | 19,938 | 42.21 | – | – | |||||||||||||||
RSUs — granted to employees | 1,429,554 | 30.32 | – | – | |||||||||||||||
RSUs — granted to directors | 38,957 | 33.37 | 7,496 | 33.35 | |||||||||||||||
Forfeited / cancelled | (276,627 | ) | 38.61 | – | – | ||||||||||||||
Vested / settled awards | (1,633,599 | ) | 45.28 | (5,047 | ) | 44.83 | |||||||||||||
Vested / unsettled awards | (243,335 | ) | 46.10 | – | – | ||||||||||||||
Unvested at end of period | 3,043,451 | $ | 37.70 | 12,072 | $ | 37.81 | |||||||||||||
December 31, 2015 | |||||||||||||||||||
Unvested at beginning of period | 2,268,484 | $ | 44.22 | 6,353 | $ | 41.99 | |||||||||||||
Vested / unsettled Stock Salary at beginning of period | 25,255 | 40.38 | 1,082 | 39.05 | |||||||||||||||
PSUs — granted to employees | 445,020 | 45.88 | – | – | |||||||||||||||
PSUs — incremental for performance above 2012-14 targets | 102,881 | 45.88 | – | – | |||||||||||||||
RSUs — granted to employees | 2,001,931 | 45.36 | – | – | |||||||||||||||
RSUs — granted to directors | 28,216 | 46.22 | 6,166 | 46.42 | |||||||||||||||
Forfeited / cancelled | (173,903 | ) | 45.30 | – | – | ||||||||||||||
Vested / settled awards | (1,273,961 | ) | 42.50 | (3,978 | ) | 40.85 | |||||||||||||
Vested / unsettled Stock Salary Awards | (39,626 | ) | 40.46 | – | – | ||||||||||||||
Unvested at end of period | 3,384,297 | $ | 45.55 | 9,623 | $ | 44.97 |
December 31, 2016 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Due to Expire | December 31, 2015 | ||||||||||||||||||
Within One Year | After One Year | Total Outstanding | Total Outstanding | ||||||||||||||||
Financing Commitments | |||||||||||||||||||
Financing assets | $ | 1,003.6 | $ | 5,004.5 | $ | 6,008.1 | $ | 7,385.6 | |||||||||||
Letters of credit | |||||||||||||||||||
Standby letters of credit | 37.2 | 195.0 | 232.2 | 315.3 | |||||||||||||||
Other letters of credit | 14.0 | – | 14.0 | 18.3 | |||||||||||||||
Guarantees | |||||||||||||||||||
Deferred purchase agreements | 2,060.5 | – | 2,060.5 | 1,806.5 | |||||||||||||||
Guarantees, acceptances and other recourse obligations | 1.6 | – | 1.6 | 0.7 | |||||||||||||||
Purchase and Funding Commitments | |||||||||||||||||||
Aerospace purchase commitments(1) | 607.9 | 8,075.6 | 8,683.5 | 9,618.1 | |||||||||||||||
Rail and other purchase commitments | 272.9 | 27.8 | 300.7 | 898.2 |
(1) | Aerospace purchase commitments are associated with Aerospace discontinued operations. |
HELOC participation and servicing agreement entered into with the FDIC, the FDIC agreed to reimburse the Company for a portion of the draws that the Company made on the purchased HELOCs.
establishes reserves for Litigation when those matters present loss contingencies as to which it is both probable that a loss will occur and the amount of such loss can be reasonably estimated. Based on currently available information, CIT believes that the results of Litigation that is currently pending, taken together, will not have a material adverse effect on the Company’s financial condition, but may be material to the Company’s operating results or cash flows for any particular period, depending in part on its operating results for that period. The actual results of resolving such matters may be substantially higher than the amounts reserved.
Years Ended December 31, | |||||||
2017 | $ | 49.3 | |||||
2018 | 46.6 | ||||||
2019 | 44.8 | ||||||
2020 | 38.7 | ||||||
2021 | 27.0 | ||||||
Thereafter | 77.4 | ||||||
Total | $ | 283.8 |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(dollars in millions) | 2016 | 2015(1) | 2014(1) | ||||||||||||
Premises | $ | 42.1 | $ | 28.7 | $ | 16.9 | |||||||||
Equipment | 1.7 | 1.8 | 2.3 | ||||||||||||
Total | $ | 43.8 | $ | 30.5 | $ | 19.2 |
(1) | In preparing the year-end financial statements as of December 31, 2016, the Company discovered and corrected an immaterial error impacting the amount of rental expense disclosed in the table above which resulted in decreases to rental expense of $6 million and $4 million for the years ended December 31, 2015 and December 31, 2014, respectively. |
aggregate value of $226 million in the year ended December 31, 2015. There were no aircraft sold to TC-CIT Aviation for the year ended December 31, 2016. In 2016, servicing fees of $9.8 million were billed by CIT to TC-CIT Aviation for the year ended December 31, 2016. CIT also made and maintains a minority equity investment in TC-CIT Aviation in the amount of approximately $81 million and $50 million, which is included in discontinued operations at December 31, 2016 and 2015, respectively. CTL made and maintains a majority equity interest in the joint venture and is a lender to the companies. SeeNote 31 — Subsequent Eventsfor announced sale of the Company’s ownership stake in TC-CIT Aviation.
- | Commercial Banking (formerly North America Banking or “NAB”) no longer includes the Consumer Banking division or the Canadian Corporate and Equipment Finance business. Commercial Banking is comprised of Commercial Finance, Real Estate Finance, and Business Capital. Business Capital includes the former Equipment Finance and Commercial Services divisions, which had been discrete divisions in the year ago filing. In the fourth quarter of 2016 we further realigned our segments and included Rail as a fourth division. Also part of the fourth quarter realignment, Commercial Finance includes the Maritime Finance portfolio along with the remaining Commercial Air loans not part of discontinued operations. Rail, Maritime Finance and Commercial Air loans not part of discontinued operations were all part of the former Transportation Finance Segment. |
- | Transportation Finance (formerly Transportation & International Finance or “TIF”) no longer exists as a separate business segment. In our initial realignment early in 2016, we transferred the international business in China and the U.K. to NSP, such that Transportation Finance was then comprised of three divisions, Aerospace (composed of Commercial Air and Business Air), Rail and Maritime Finance. Based on the definitive sale agreement with respect to Commercial Air that we executed on October 6, 2016, the activity of the Commercial Air business that is subject to the sale agreement, as well as activity associated with the Business Air assets, are reported as discontinued operations. As mentioned above, Rail, Maritime Finance and commercial air loans not part of discontinued operations were transferred to Commercial Banking. |
- | Consumer Banking includes Legacy Consumer Mortgages (the former LCM segment) and Other Consumer Banking divisions that were included in the former NAB segment (Retail Banking, Consumer Lending, and SBA Lending). |
- | NSP includes businesses that we no longer consider strategic and as of December 31, 2016, essentially all of the remaining portfolio was in China. Historic data also includes businesses and portfolios that have been sold, in countries such as Canada, the U.K., Mexico, and Brazil. |
retail branch network, private bankers, the commercial business units, as well as indirectly through institutional intermediaries. Mortgage lending includes product specialists, internal sales support and origination processing, structuring and closing. Retail banking is the primary deposit gathering business of CIT Bank and operates through 70 retail branches in Southern California and an online direct channel. We offer a broad range of deposit and lending products to meet the needs of our customers, including: checking, savings, certificates of deposit, residential mortgage loans, and fiduciary services. The division also originates qualified Small Business Administration (“SBA”) 504 loans (generally, the financing provides growing small businesses with long-term, fixed-rate financing for major fixed assets, such as land and building) and 7(a) (generally, for purchase/refinance of owner occupied commercial real estate, working capital, acquisition of inventory, machinery, equipment, furniture, and fixtures, the refinance of outstanding debt subject to any program guidelines, and acquisition of businesses, including partnership buyouts).
For the year ended December 31, 2016 | Commercial Banking | Consumer Banking | Non-Strategic Portfolios | Corporate & Other | Total CIT | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Interest income | $ | 1,287.9 | $ | 420.8 | $ | 80.8 | $ | 122.0 | $ | 1,911.5 | |||||||||||||
Interest expense | (519.1 | ) | (10.2 | ) | (47.2 | ) | (176.7 | ) | (753.2 | ) | |||||||||||||
Provision for credit losses | (183.1 | ) | (11.7 | ) | 0.1 | – | (194.7 | ) | |||||||||||||||
Rental income on operating leases | 1,020.0 | – | 11.6 | – | 1,031.6 | ||||||||||||||||||
Other income | 293.8 | 40.0 | 52.1 | (235.3 | ) | 150.6 | |||||||||||||||||
Depreciation on operating lease equipment | (261.1 | ) | – | – | – | (261.1 | ) | ||||||||||||||||
Maintenance and other operating lease expenses | (213.6 | ) | – | – | – | (213.6 | ) | ||||||||||||||||
Goodwill impairment | (34.8 | ) | (319.4 | ) | – | – | (354.2 | ) | |||||||||||||||
Operating expenses / loss on debt extinguishment | (761.6 | ) | (380.9 | ) | (42.2 | ) | (111.3 | ) | (1,296.0 | ) | |||||||||||||
Income (loss) from continuing operations before (provision) benefit for income taxes | $ | 628.4 | $ | (261.4 | ) | $ | 55.2 | $ | (401.3 | ) | $ | 20.9 | |||||||||||
Select Period End Balances | |||||||||||||||||||||||
Loans | $ | 22,562.3 | $ | 6,973.6 | $ | – | $ | – | $ | 29,535.9 | |||||||||||||
Credit balances of factoring clients | (1,292.0 | ) | – | – | – | (1,292.0 | ) | ||||||||||||||||
Assets held for sale | 357.7 | 68.2 | 210.1 | – | 636.0 | ||||||||||||||||||
Operating lease equipment, net | 7,486.1 | – | – | – | 7,486.1 | ||||||||||||||||||
For the year ended December 31, 2015 | |||||||||||||||||||||||
Interest income | $ | 1,029.1 | $ | 176.1 | $ | 184.8 | $ | 55.2 | $ | 1,445.2 | |||||||||||||
Interest expense | (481.4 | ) | (24.9 | ) | (121.4 | ) | (103.7 | ) | (731.4 | ) | |||||||||||||
Provision for credit losses | (143.7 | ) | (8.7 | ) | (6.2 | ) | – | (158.6 | ) | ||||||||||||||
Rental income on operating leases | 981.4 | – | 36.7 | – | 1,018.1 | ||||||||||||||||||
Other income | 302.6 | 5.4 | (96.8 | ) | (61.6 | ) | 149.6 | ||||||||||||||||
Depreciation on operating lease equipment | (218.3 | ) | – | (10.9 | ) | – | (229.2 | ) | |||||||||||||||
Maintenance and other operating lease expenses | (185.1 | ) | – | – | – | (185.1 | ) | ||||||||||||||||
Operating expenses / loss on debt extinguishment | (727.4 | ) | (158.4 | ) | (123.9 | ) | (112.9 | ) | (1,122.6 | ) | |||||||||||||
Income (loss) from continuing operations before (provision) benefit for income taxes | $ | 557.2 | $ | (10.5 | ) | $ | (137.7 | ) | $ | (223.0 | ) | $ | 186.0 | ||||||||||
Select Period End Balances | |||||||||||||||||||||||
Loans | $ | 23,332.4 | $ | 7,186.3 | $ | – | $ | – | $ | 30,518.7 | |||||||||||||
Credit balances of factoring clients | (1,344.0 | ) | – | – | – | (1,344.0 | ) | ||||||||||||||||
Assets held for sale | 435.1 | 45.1 | 1,577.5 | – | 2,057.7 | ||||||||||||||||||
Operating lease equipment, net | 6,851.7 | – | – | – | 6,851.7 |
For the year ended December 31, 2014 | Commercial Banking | Consumer Banking | Non-Strategic Portfolios | Corporate & Other | Total CIT | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Interest income | $ | 845.8 | $ | – | $ | 295.6 | $ | 14.2 | $ | 1,155.6 | ||||||||||||
Interest expense | (441.9 | ) | – | (218.4 | ) | (54.8 | ) | (715.1 | ) | |||||||||||||
Provision for credit losses | (73.3 | ) | – | (30.9 | ) | (0.2 | ) | (104.4 | ) | |||||||||||||
Rental income on operating leases | 896.0 | – | 53.6 | – | 949.6 | |||||||||||||||||
Other income | 327.7 | – | (27.5 | ) | (36.3 | ) | 263.9 | |||||||||||||||
Depreciation on operating lease equipment | (201.0 | ) | – | (28.8 | ) | – | (229.8 | ) | ||||||||||||||
Maintenance and other operating lease costs | (171.7 | ) | – | – | – | (171.7 | ) | |||||||||||||||
Operating expenses / loss on debt extinguishment | (642.3 | ) | – | (180.9 | ) | (80.4 | ) | (903.6 | ) | |||||||||||||
Income (loss) from continuing operations before (provisions) benefit for income taxes | $ | 539.3 | $ | – | $ | (137.3 | ) | $ | (157.5 | ) | $ | 244.5 | ||||||||||
Select Period End Balances | ||||||||||||||||||||||
Loans | $ | 16,727.8 | $ | – | $ | 1,532.8 | $ | – | $ | 18,260.6 | ||||||||||||
Credit balances of factoring clients | (1,622.1 | ) | – | – | – | (1,622.1 | ) | |||||||||||||||
Assets held for sale | 43.7 | – | 782.8 | – | 826.5 | |||||||||||||||||
Operating lease equipment, net | 5,937.1 | – | 43.8 | – | 5,980.9 |
Total Assets(1) | Total Revenue from continuing operations | (Loss) income from continuing operations before (provision) benefit for income taxes | (Loss) income from continuing operations before attribution of noncontrolling interests | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
U.S. | 2016 | $ | 53,252.9 | $ | 2,755.6 | $ | 157.5 | $ | 99.3 | |||||||||||||
2015 | $ | 55,491.1 | $ | 2,084.5 | $ | 227.6 | $ | 876.7 | ||||||||||||||
2014 | $ | 34,924.8 | $ | 1,713.5 | $ | 270.3 | $ | 730.9 | ||||||||||||||
Europe | 2016 | $ | 8,575.7 | $ | 139.7 | $ | (189.2 | ) | $ | (246.8 | ) | |||||||||||
2015 | $ | 8,351.8 | $ | 125.0 | $ | (227.6 | ) | $ | (304.6 | ) | ||||||||||||
2014 | $ | 7,898.7 | $ | 192.5 | $ | (209.2 | ) | $ | (221.6 | ) | ||||||||||||
Other foreign | 2016 | $ | 2,341.6 | $ | 198.4 | $ | 52.6 | $ | (35.1 | ) | ||||||||||||
2015 | $ | 3,549.0 | $ | 403.4 | $ | 186.0 | $ | 151.9 | ||||||||||||||
2014 | $ | 4,932.0 | $ | 463.1 | $ | 183.4 | $ | 167.6 | ||||||||||||||
Total consolidated | 2016 | $ | 64,170.2 | $ | 3,093.7 | $ | 20.9 | $ | (182.6 | ) | ||||||||||||
2015 | $ | 67,391.9 | $ | 2,612.9 | $ | 186.0 | $ | 724.0 | ||||||||||||||
2014 | $ | 47,755.5 | $ | 2,369.1 | $ | 244.5 | $ | 676.9 |
(1) | Includes Assets of discontinued operation of $13,220.7 million at December 31, 2016, $13,059.6 million at December 31, 2015 and $12,493.7 million at December 31, 2014. |
Commercial Banking | Consumer Banking | Non-Strategic Portfolios | Total | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2014 | $ | 403.3 | $ | – | $ | 29.0 | $ | 432.3 | ||||||||||
Additions | 288.8 | 374.2 | – | 663.0 | ||||||||||||||
Other activity(1) | (3.1 | ) | – | (29.0 | ) | (32.1 | ) | |||||||||||
December 31, 2015(2) | 689.0 | 374.2 | – | 1,063.2 | ||||||||||||||
Impairment(3) | (34.8 | ) | (319.4 | ) | – | (354.2 | ) | |||||||||||
Other Activity(4) | (12.0 | ) | (11.6 | ) | – | (23.6 | ) | |||||||||||
December 31, 2016 | $ | 642.2 | $ | 43.2 | $ | – | $ | 685.4 |
(1) | Includes adjustments related to transfer to held for sale and foreign exchange translation. |
(2) | In preparing the interim financial statements for the quarter ended June 30, 2016, the Company discovered and corrected an immaterial error impacting the December 31, 2015 goodwill allocation among Consumer Banking and Commercial Banking in the amount of $23.2 million. The reclassification had no impact on the Company’s Balance Sheet and Statements of Income or Cash Flows for any period. |
(3) | The impairment charges exclude goodwill impairment recorded upon transfer of assets to held for sale of $4 million and $15 million for the years ended December 31, 2016 and 2015, respectively. |
(4) | Includes measurement period adjustments related to the OneWest transaction, as described below, and foreign exchange translation. |
Accordingly, during the fourth quarter of 2016, the Company performed its annual goodwill impairment test.
December 31, 2016 | December 31, 2015 | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||
Core deposit intangibles | $ | 126.3 | $ | (25.4 | ) | $ | 100.9 | $ | 126.3 | $ | (7.5 | ) | $ | 118.8 | |||||||||||||
Trade names | 27.4 | (6.1 | ) | 21.3 | 27.4 | (3.0 | ) | 24.4 | |||||||||||||||||||
Operating lease rental intangibles | 7.6 | (6.7 | ) | 0.9 | 9.6 | (8.9 | ) | 0.7 | |||||||||||||||||||
Customer relationships | 23.9 | (7.1 | ) | 16.8 | 23.9 | (3.2 | ) | 20.7 | |||||||||||||||||||
Other | 2.1 | (1.3 | ) | 0.8 | 2.1 | (0.6 | ) | 1.5 | |||||||||||||||||||
Total intangible assets | $ | 187.3 | $ | (46.6 | ) | $ | 140.7 | $ | 189.3 | $ | (23.2 | ) | $ | 166.1 |
Customer Relationships | Core Deposit Intangibles | Trade Names | Operating Lease Rental Intangibles | Other | Total | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31, 2014 | $ | 6.8 | $ | – | $ | 6.9 | $ | 2.2 | $ | 0.5 | $ | 16.4 | ||||||||||||||
Additions(1) | 16.6 | 126.3 | 20.1 | – | 1.7 | 164.7 | ||||||||||||||||||||
Amortization(2) | (2.7 | ) | (7.5 | ) | (2.4 | ) | (1.5 | ) | (0.7 | ) | (14.8 | ) | ||||||||||||||
Other(3) | – | – | (0.2 | ) | – | – | (0.2 | ) | ||||||||||||||||||
December 31, 2015 | $ | 20.7 | $ | 118.8 | $ | 24.4 | $ | 0.7 | $ | 1.5 | $ | 166.1 | ||||||||||||||
Additions | – | – | – | 1.8 | – | 1.8 | ||||||||||||||||||||
Amortization(2) | (3.9 | ) | (17.9 | ) | (3.1 | ) | (1.6 | ) | (0.7 | ) | (27.2 | ) | ||||||||||||||
December 31, 2016 | $ | 16.8 | $ | 100.9 | $ | 21.3 | $ | 0.9 | $ | 0.8 | $ | 140.7 |
(1) | Includes measurement period adjustments related to the OneWest Transaction. |
(2) | Includes amortization recorded in operating expenses and operating lease rental income. |
(3) | Includes foreign exchange translation. |
Severance | Facilities | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Number of Employees | Liability | Number of Facilities | Liability | Total Liabilities | ||||||||||||||||||
December 31, 2014 | 47 | $ | 8.7 | 12 | $ | 23.7 | $ | 32.4 | ||||||||||||||
Additions and adjustments | 74 | 38.7 | 2 | 1.6 | 40.3 | |||||||||||||||||
Utilization | (68 | ) | (10.5 | ) | (6 | ) | (6.2 | ) | (16.7 | ) | ||||||||||||
December 31, 2015 | 53 | 36.9 | 8 | 19.1 | 56.0 | |||||||||||||||||
Additions and adjustments | 165 | 28.6 | 5 | (0.6 | ) | 28.0 | ||||||||||||||||
Utilization | (183 | ) | (62.3 | ) | (2 | ) | (3.4 | ) | (65.7 | ) | ||||||||||||
December 31, 2016 | 35 | $ | 3.2 | 11 | $ | 15.1 | $ | 18.3 |
December 31, 2016 | December 31, 2015 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Assets: | |||||||||||
Cash and deposits | $ | 1,172.8 | $ | 1,014.5 | |||||||
Cash held at bank subsidiary | 15.4 | 15.3 | |||||||||
Investment securities | 400.3 | 300.1 | |||||||||
Receivables from nonbank subsidiaries | 9,172.9 | 8,951.4 | |||||||||
Receivables from bank subsidiaries | 34.7 | 35.6 | |||||||||
Investment in nonbank subsidiaries | 3,597.4 | 4,989.7 | |||||||||
Investment in bank subsidiaries | 5,187.9 | 5,582.1 | |||||||||
Goodwill | 261.4 | 319.6 | |||||||||
Other assets | 2,217.7 | 2,158.9 | |||||||||
Total Assets | $ | 22,060.5 | $ | 23,367.2 | |||||||
Liabilities and Equity: | |||||||||||
Borrowings | $ | 10,599.0 | $ | 10,677.7 | |||||||
Liabilities to nonbank subsidiaries | 907.9 | 1,029.9 | |||||||||
Liabilities to bank subsidiaries | 4.6 | 19.8 | |||||||||
Other liabilities | 546.3 | 695.1 | |||||||||
Total Liabilities | $ | 12,057.8 | $ | 12,422.5 | |||||||
Total Stockholders’ Equity | 10,002.7 | 10,944.7 | |||||||||
Total Liabilities and Equity | $ | 22,060.5 | $ | 23,367.2 |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Income | |||||||||||||||
Interest income from nonbank subsidiaries | $ | 488.3 | $ | 435.1 | $ | 560.3 | |||||||||
Interest and dividends on interest bearing deposits and investments | 2.7 | 3.2 | 1.4 | ||||||||||||
Dividends from nonbank subsidiaries | 399.9 | 630.3 | 526.8 | ||||||||||||
Dividends from bank subsidiaries | 223.0 | 459.2 | 39.4 | ||||||||||||
Other income from subsidiaries | 146.3 | (138.8 | ) | (62.4 | ) | ||||||||||
Other income | 21.0 | 128.8 | 103.8 | ||||||||||||
Total income | 1,281.2 | 1,517.8 | 1,169.3 | ||||||||||||
Expenses | |||||||||||||||
Interest expense | (548.2 | ) | (570.7 | ) | (649.6 | ) | |||||||||
Interest expense on liabilities to subsidiaries | (51.1 | ) | (43.9 | ) | (166.4 | ) | |||||||||
Other expenses | (565.0 | ) | (267.2 | ) | (199.4 | ) | |||||||||
Total expenses | (1,164.3 | ) | (881.8 | ) | (1,015.4 | ) | |||||||||
Income before income taxes and equity in undistributed net income of subsidiaries | 116.9 | 636.0 | 153.9 | ||||||||||||
Benefit for income taxes | 308.5 | 827.2 | 769.6 | ||||||||||||
Income before equity in undistributed net income of subsidiaries | 425.4 | 1,463.2 | 923.5 | ||||||||||||
Equity in undistributed net income of bank subsidiaries | (349.8 | ) | (265.1 | ) | 76.5 | ||||||||||
Equity in undistributed net income of nonbank subsidiaries | (923.6 | ) | (164.0 | ) | 119.1 | ||||||||||
Net (loss) income | (848.0 | ) | 1,034.1 | 1,119.1 | |||||||||||
Other Comprehensive income (loss) income, net of tax | 2.0 | (8.2 | ) | (60.3 | ) | ||||||||||
Comprehensive (loss) income | $ | (846.0 | ) | $ | 1,025.9 | $ | 1,058.8 |
Years Ended December 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 | 2015 | 2014 | |||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||
Net (loss) income | $ | (848.0 | ) | $ | 1,034.1 | $ | 1,119.1 | ||||||||
Equity in undistributed earnings of subsidiaries | 650.4 | 429.1 | (195.6 | ) | |||||||||||
Other operating activities, net | 47.1 | (588.6 | ) | (735.4 | ) | ||||||||||
Net cash flows (used in) provided by operations | (150.5 | ) | 874.6 | 188.1 | |||||||||||
Cash Flows From Investing Activities: | |||||||||||||||
Decrease (increase) in investments and advances to subsidiaries | 1,023.1 | 620.1 | (92.6 | ) | |||||||||||
Acquisitions | – | (1,559.5 | ) | – | |||||||||||
Decrease (increase) in Investment securities and securities purchased under agreements to resell | (100.2 | ) | 1,454.1 | 342.3 | |||||||||||
Net cash flows provided by investing activities | 922.9 | 514.7 | 249.7 | ||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||
Proceeds from the issuance of term debt | – | – | 991.3 | ||||||||||||
Repayments of term debt | (359.5 | ) | (1,256.7 | ) | (1,603.0 | ) | |||||||||
Repurchase of common stock | – | (531.8 | ) | (775.5 | ) | ||||||||||
Dividends paid | (123.0 | ) | (114.9 | ) | (95.3 | ) | |||||||||
Net change in advances (to) from subsidiaries | (131.5 | ) | 91.0 | 902.1 | |||||||||||
Net cash flows used in financing activities | (614.0 | ) | (1,812.4 | ) | (580.4 | ) | |||||||||
Net (decrease) increase in unrestricted cash and cash equivalents | 158.4 | (423.1 | ) | (142.6 | ) | ||||||||||
Unrestricted cash and cash equivalents, beginning of period | 1,029.8 | 1,452.9 | 1,595.5 | ||||||||||||
Unrestricted cash and cash equivalents, end of period | $ | 1,188.2 | $ | 1,029.8 | $ | 1,452.9 |
Unaudited | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||||||
For the year ended December 31, 2016 | |||||||||||||||||||
Interest income | $ | 474.1 | $ | 475.8 | $ | 478.7 | $ | 482.9 | |||||||||||
Interest expense | (178.3 | ) | (188.3 | ) | (191.6 | ) | (195.0 | ) | |||||||||||
Provision for credit losses | (36.7 | ) | (45.2 | ) | (23.3 | ) | (89.5 | ) | |||||||||||
Rental income on operating leases | 252.2 | 254.3 | 261.0 | 264.1 | |||||||||||||||
Other income | (117.6 | ) | 83.6 | 99.8 | 84.8 | ||||||||||||||
Depreciation on operating lease equipment | (69.8 | ) | (66.9 | ) | (63.1 | ) | (61.3 | ) | |||||||||||
Maintenance and other operating lease expenses | (57.5 | ) | (56.6 | ) | (50.6 | ) | (48.9 | ) | |||||||||||
Goodwill impairment | (354.2 | ) | – | – | – | ||||||||||||||
Operating expenses | (341.3 | ) | (302.8 | ) | (309.3 | ) | (330.1 | ) | |||||||||||
Loss on debt extinguishment and deposit redemption | (3.3 | ) | (5.2 | ) | (2.4 | ) | (1.6 | ) | |||||||||||
Benefit (provision) for income taxes | 6.6 | (54.5 | ) | (111.2 | ) | (44.4 | ) | ||||||||||||
(Loss) income from discontinued operations, net of taxes | (716.7 | ) | 37.3 | (71.0 | ) | 85.0 | |||||||||||||
Net (loss) income | $ | (1,142.5 | ) | $ | 131.5 | $ | 17.0 | $ | 146.0 | ||||||||||
Net (loss) income per diluted share | $ | (5.65 | ) | $ | 0.65 | $ | 0.08 | $ | 0.72 | ||||||||||
For the year ended December 31, 2015 | |||||||||||||||||||
Interest income | $ | 492.4 | 418.5 | $ | 269.5 | $ | 264.8 | ||||||||||||
Interest expense | (197.6 | ) | (193.3 | ) | (168.8 | ) | (171.7 | ) | |||||||||||
Provision for credit losses | (59.2 | ) | (50.3 | ) | (18.7 | ) | (30.4 | ) | |||||||||||
Rental income on operating leases | 255.9 | 259.5 | 255.1 | 247.6 | |||||||||||||||
Other income | 21.7 | 24.9 | 51.2 | 51.8 | |||||||||||||||
Depreciation on operating lease equipment | (57.2 | ) | (58.8 | ) | (57.6 | ) | (55.6 | ) | |||||||||||
Maintenance and other operating lease expenses | (53.9 | ) | (49.0 | ) | (42.6 | ) | (39.6 | ) | |||||||||||
Operating expenses | (351.8 | ) | (327.5 | ) | (219.2 | ) | (222.6 | ) | |||||||||||
Loss on debt extinguishment and deposit redemption | (1.1 | ) | (0.3 | ) | (0.1 | ) | – | ||||||||||||
Benefit (provision) for income taxes | 15.8 | 581.9 | (36.9 | ) | (22.8 | ) | |||||||||||||
Income attributable to noncontrolling interest, after tax | – | – | – | 0.1 | |||||||||||||||
Income from discontinued operation, net of taxes | 75.0 | 72.0 | 81.9 | 81.1 | |||||||||||||||
Net income | $ | 140.0 | $ | 677.6 | $ | 113.8 | $ | 102.7 | |||||||||||
Net income per diluted share | $ | 0.70 | $ | 3.53 | $ | 0.65 | $ | 0.58 |
March 31, 2016 | June 30, 2016 | September 30, 2016 | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
As Reported | As Revised | As Reported | As Revised | As Reported | As Revised | ||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||
Total cash and deposits | $ | 7,489.4 | $ | 7,489.4 | $ | 7,435.5 | $ | 7,435.5 | $ | 6,752.5 | $ | 6,752.5 | |||||||||||||||
Investment securities | 2,896.8 | 2,896.8 | 3,229.1 | 3,229.1 | 3,592.4 | 3,592.4 | |||||||||||||||||||||
Assets held for sale(1) | 1,487.4 | 1,487.4 | 1,639.1 | 1,639.1 | 1,406.7 | 1,406.7 | |||||||||||||||||||||
Loans | 30,953.5 | 30,948.7 | 30,104.2 | 30,093.8 | 29,906.8 | 29,897.0 | |||||||||||||||||||||
Allowance for loan losses | (400.8 | ) | (400.8 | ) | (397.5 | ) | (393.1 | ) | (421.7 | ) | (415.0 | ) | |||||||||||||||
Total loans, net of allowance for loan losses(1) | 30,552.7 | 30,547.9 | 29,706.7 | 29,700.7 | 29,485.1 | 29,482.0 | |||||||||||||||||||||
Operating lease equipment, net(1) | 7,071.4 | 7,071.4 | 7,179.1 | 7,179.1 | 7,383.1 | 7,383.1 | |||||||||||||||||||||
Indemnification assets | 389.4 | 381.4 | 375.5 | 386.0 | 362.2 | 362.4 | |||||||||||||||||||||
Unsecured counterparty receivable | 556.3 | 556.3 | 570.2 | 570.2 | 560.2 | 560.2 | |||||||||||||||||||||
Goodwill | 1,060.0 | 1,060.0 | 1,044.1 | 1,044.1 | 1,043.7 | 1,043.7 | |||||||||||||||||||||
Intangible assets | 160.9 | 160.9 | 154.2 | 154.2 | 147.6 | 147.6 | |||||||||||||||||||||
Other assets | 2,481.6 | 2,485.4 | 2,406.0 | 2,407.4 | 2,258.6 | 2,277.1 | |||||||||||||||||||||
Assets of discontinued operations | 12,951.7 | 12,951.7 | 12,960.8 | 12,960.8 | 12,973.4 | 12,973.4 | |||||||||||||||||||||
Total Assets | $ | 67,097.6 | $ | 67,088.6 | $ | 66,700.3 | $ | 66,706.2 | $ | 65,965.5 | $ | 65,981.1 | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||
Deposits | $ | 32,877.8 | $ | 32,877.8 | $ | 32,862.5 | $ | 32,862.5 | $ | 32,851.7 | $ | 32,851.7 | |||||||||||||||
Credit balances of factoring clients | 1,361.0 | 1,361.0 | 1,215.2 | 1,215.2 | 1,228.9 | 1,228.9 | |||||||||||||||||||||
Other liabilities | 1,555.8 | 1,581.0 | 1,529.9 | 1,557.6 | 1,598.0 | 1,623.3 | |||||||||||||||||||||
Borrowings | 15,981.6 | 15,981.6 | 15,583.6 | 15,583.6 | 14,683.9 | 14,684.0 | |||||||||||||||||||||
Liabilities of discontinued operations | 4,195.1 | 4,195.1 | 4,384.4 | 4,394.0 | 4,365.5 | 4,388.3 | |||||||||||||||||||||
Total Liabilities | 55,971.3 | 55,996.5 | 55,575.6 | 55,612.9 | 54,728.0 | 54,776.2 | |||||||||||||||||||||
Stockholders’ Equity | |||||||||||||||||||||||||||
Common stock | 2.1 | 2.1 | 2.1 | 2.1 | 2.1 | 2.1 | |||||||||||||||||||||
Paid-in capital | 8,739.4 | 8,739.4 | 8,749.8 | 8,749.8 | 8,758.2 | 8,758.2 | |||||||||||||||||||||
Retained earnings | 2,673.7 | 2,639.5 | 2,656.9 | 2,625.5 | 2,758.9 | 2,726.3 | |||||||||||||||||||||
Accumulated other comprehensive loss | (117.4 | ) | (117.4 | ) | (107.6 | ) | (107.6 | ) | (104.2 | ) | (104.2 | ) | |||||||||||||||
Treasury stock | (172.0 | ) | (172.0 | ) | (177.0 | ) | (177.0 | ) | (178.0 | ) | (178.0 | ) | |||||||||||||||
Total Common Stockholders’ Equity | 11,125.8 | 11,091.6 | 11,124.2 | 11,092.8 | 11,237.0 | 11,204.4 | |||||||||||||||||||||
Noncontrolling minority interests | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | |||||||||||||||||||||
Total Equity | 11,126.3 | 11,092.1 | 11,124.7 | 11,093.3 | 11,237.5 | 11,204.9 | |||||||||||||||||||||
Total Liabilities and Equity | $ | 67,097.6 | $ | 67,088.6 | $ | 66,700.3 | $ | 66,706.2 | $ | 65,965.5 | $ | 65,981.1 |
(1) | The following table presents information on assets and liabilities related to Variable Interest Entities (VIEs) that are consolidated by the Company. The difference between VIE total assets and total liabilities represents the Company’s interests in those entities, which were eliminated in consolidation. The assets of the consolidated VIEs will be used to settle the liabilities of those entities and, except for the Company’s interest in the VIEs, are not available to the creditors of CIT or any affiliates of CIT. |
Assets | |||||||||||||||||||||||||||
Cash and interest bearing deposits, restricted | $ | 242.5 | $ | 242.5 | $ | 213.8 | $ | 213.8 | $ | 237.5 | $ | 237.5 | |||||||||||||||
Assets held for sale | 240.5 | 240.5 | 212.5 | 212.5 | – | – | |||||||||||||||||||||
Total loans, net of allowance for loan losses | 2,283.7 | 2,283.7 | 1,945.2 | 1,945.2 | 2,061.6 | 2,061.6 | |||||||||||||||||||||
Operating lease equipment, net | 791.8 | 791.8 | 785.3 | 785.3 | 780.6 | 780.6 | |||||||||||||||||||||
Other | 11.1 | 11.1 | 11.0 | 11.0 | – | – | |||||||||||||||||||||
Assets of discontinued operations | 3,168.1 | 3,369.1 | 3,069.4 | 3,267.7 | 2,973.7 | 3,223.8 | |||||||||||||||||||||
Total Assets | $ | 6,737.7 | $ | 6,938.7 | $ | 6,237.2 | $ | 6,435.5 | $ | 6,053.4 | $ | 6,303.5 | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||
Beneficial interests issued by consolidated VIEs (classified as long-term borrowings) | $ | 1,696.8 | $ | 1,696.8 | $ | 1,487.9 | $ | 1,487.9 | $ | 1,196.5 | $ | 1,196.5 | |||||||||||||||
Liabilities of discontinued operations | 2,021.5 | 2,021.5 | 1,926.4 | 1,926.4 | 1,864.7 | 1,864.7 | |||||||||||||||||||||
Total Liabilities | $ | 3,718.3 | $ | 3,718.3 | $ | 3,414.3 | $ | 3,414.3 | $ | 3,061.2 | $ | 3,061.2 |
March 31, 2015 | June 30, 2015 | September 30, 2015 | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
As Reported | As Revised | As Reported | As Revised | As Reported | As Revised | ||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||
Total cash and deposits | $ | 5,551.6 | $ | 5,551.6 | $ | 4,767.9 | $ | 4,767.9 | $ | 7,631.9 | $ | 7,631.9 | |||||||||||||||
Securities purchased under agreements to resell | 450.0 | 450.0 | 750.0 | 750.0 | 100.0 | 100.0 | |||||||||||||||||||||
Investment securities | 1,347.4 | 1,347.4 | 1,692.9 | 1,692.9 | 3,618.8 | 3,618.8 | |||||||||||||||||||||
Assets held for sale(1) | 817.4 | 817.4 | 843.0 | 843.0 | 2,051.9 | 2,051.9 | |||||||||||||||||||||
Loans | 18,212.4 | 18,212.4 | 18,439.8 | 18,439.8 | 31,248.1 | 31,248.4 | |||||||||||||||||||||
Allowance for loan losses | (340.2 | ) | (340.2 | ) | (334.9 | ) | (334.9 | ) | (320.9 | ) | (320.9 | ) | |||||||||||||||
Total loans, net of allowance for loan losses(1) | 17,872.2 | 17,872.2 | 18,104.9 | 18,104.9 | 30,927.2 | 30,927.5 | |||||||||||||||||||||
Operating lease equipment, net(1) | 6,063.8 | 6,065.1 | 6,292.9 | 6,292.9 | 6,493.0 | 6,493.0 | |||||||||||||||||||||
Indemnification assets | – | – | – | – | 465.0 | 462.9 | |||||||||||||||||||||
Unsecured counterparty receivable | 537.1 | 537.1 | 538.2 | 538.2 | 529.5 | 529.5 | |||||||||||||||||||||
Goodwill | 424.6 | 424.6 | 426.9 | 426.9 | 999.0 | 999.0 | |||||||||||||||||||||
Intangible assets | 14.8 | 14.8 | 14.1 | 14.1 | 194.8 | 194.8 | |||||||||||||||||||||
Other assets | 1,218.2 | 1,225.6 | 1,111.9 | 1,120.4 | 2,497.8 | 2,494.4 | |||||||||||||||||||||
Assets of discontinued operations | 11,997.7 | 11,996.4 | 12,002.4 | 12,002.4 | 12,510.1 | �� | 12,510.1 | ||||||||||||||||||||
Total Assets | $ | 46,294.8 | $ | 46,302.2 | $ | 46,545.1 | $ | 46,553.6 | $ | 68,019.0 | $ | 68,013.8 | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||
Deposits | $ | 16,739.9 | $ | 16,739.9 | $ | 17,256.3 | $ | 17,256.3 | $ | 32,317.0 | $ | 32,317.0 | |||||||||||||||
Credit balances of factoring clients | 1,505.3 | 1,505.3 | 1,373.3 | 1,373.3 | 1,609.3 | 1,609.3 | |||||||||||||||||||||
Other liabilities | 1,308.4 | 1,327.7 | 1,304.6 | 1,326.4 | 1,968.7 | 1,988.7 | |||||||||||||||||||||
Borrowings | 14,243.6 | 14,243.6 | 14,098.2 | 14,098.2 | 17,043.8 | 17,043.8 | |||||||||||||||||||||
Liabilities of discontinued operations | 3,738.5 | 3,738.5 | 3,705.1 | 3,705.1 | 4,281.0 | 4,281.0 | |||||||||||||||||||||
Total Liabilities | 37,535.7 | 37,555.0 | 37,737.5 | 37,759.3 | 57,219.8 | 57,239.8 | |||||||||||||||||||||
Stockholders’ Equity | |||||||||||||||||||||||||||
Common stock | 2.0 | 2.0 | 2.0 | 2.0 | 2.0 | 2.0 | |||||||||||||||||||||
Paid-in capital | 8,598.0 | 8,598.0 | 8,615.6 | 8,615.6 | 8,683.5 | 8,683.4 | |||||||||||||||||||||
Retained earnings | 1,692.3 | 1,680.4 | 1,781.1 | 1,767.7 | 2,443.4 | 2,414.6 | |||||||||||||||||||||
Accumulated other comprehensive loss | (163.1 | ) | (163.1 | ) | (158.8 | ) | (158.7 | ) | (174.3 | ) | (170.6 | ) | |||||||||||||||
Treasury stock | (1,370.6 | ) | (1,370.6 | ) | (1,432.8 | ) | (1,432.8 | ) | (155.9 | ) | (155.9 | ) | |||||||||||||||
Total Common Stockholders’ Equity | 8,758.6 | 8,746.7 | 8,807.1 | 8,793.8 | 10,798.7 | 10,773.5 | |||||||||||||||||||||
Noncontrolling minority interests | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | |||||||||||||||||||||
Total Equity | 8,759.1 | 8,747.2 | 8,807.6 | 8,794.3 | 10,799.2 | 10,774.0 | |||||||||||||||||||||
Total Liabilities and Equity | $ | 46,294.8 | $ | 46,302.2 | $ | 46,545.1 | $ | 46,553.6 | $ | 68,019.0 | $ | 68,013.8 |
(1) | The following table presents information on assets and liabilities related to Variable Interest Entities (VIEs) that are consolidated by the Company. The difference between VIE total assets and total liabilities represents the Company’s interests in those entities, which were eliminated in consolidation. The assets of the consolidated VIEs will be used to settle the liabilities of those entities and, except for the Company’s interest in the VIEs, are not available to the creditors of CIT or any affiliates of CIT. |
Assets | |||||||||||||||||||||||||||
Cash and interest bearing deposits, restricted | $ | 340.2 | $ | 340.2 | $ | 309.2 | $ | 309.2 | $ | 302.5 | $ | 302.5 | |||||||||||||||
Assets held for sale | 132.5 | 132.5 | 122.5 | 122.5 | 431.5 | 431.5 | |||||||||||||||||||||
Total loans, net of allowance for loan losses | 3,397.9 | 3,397.9 | 3,048.1 | 3,048.1 | 2,729.0 | 2,729.0 | |||||||||||||||||||||
Operating lease equipment, net | 945.0 | 945.0 | 938.1 | 938.1 | 929.2 | 929.2 | |||||||||||||||||||||
Other | 6.5 | 6.5 | 5.9 | 5.9 | 14.0 | 14.0 | |||||||||||||||||||||
Assets of discontinued operations | 3,361.6 | 3,481.5 | 3,301.1 | 3,515.1 | 3,260.1 | 3,465.6 | |||||||||||||||||||||
Total Assets | $ | 8,183.7 | $ | 8,303.6 | $ | 7,724.9 | $ | 7,938.9 | $ | 7,666.3 | $ | 7,871.8 | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||
Beneficial interests issued by consolidated VIEs (classified as long-term borrowings) | $ | 2,620.1 | $ | 2,620.1 | $ | 2,443.1 | $ | 2,443.1 | $ | 2,425.1 | $ | 2,425.1 | |||||||||||||||
Liabilities of discontinued operations | 2,281.6 | 2,281.6 | 2,220.8 | 2,220.8 | 2,159.4 | 2,159.4 | |||||||||||||||||||||
Total Liabilities | $ | 4,901.7 | $ | 4,901.7 | $ | 4,663.9 | $ | 4,663.9 | $ | 4,584.5 | $ | 4,584.5 |
Quarter Ended March 31, 2016 | Quarter Ended June 30, 2016 | Quarter Ended September 30, 2016 | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
As Reported | As Revised | As Reported | As Revised | As Reported | As Revised | ||||||||||||||||||||||
Interest income | |||||||||||||||||||||||||||
Interest and fees on loans | $ | 448.5 | $ | 451.9 | $ | 448.3 | $ | 447.6 | $ | 440.6 | $ | 443.9 | |||||||||||||||
Other interest and dividends | 30.9 | 31.0 | 31.2 | 31.1 | 31.9 | 31.9 | |||||||||||||||||||||
Interest income | 479.4 | 482.9 | 479.5 | 478.7 | 472.5 | 475.8 | |||||||||||||||||||||
Interest expense | |||||||||||||||||||||||||||
Interest on borrowings | (95.5 | ) | (95.5 | ) | (92.1 | ) | (92.2 | ) | (88.8 | ) | (88.8 | ) | |||||||||||||||
Interest on deposits | (99.5 | ) | (99.5 | ) | (99.5 | ) | (99.4 | ) | (99.4 | ) | (99.5 | ) | |||||||||||||||
Interest expense | (195.0 | ) | (195.0 | ) | (191.6 | ) | (191.6 | ) | (188.2 | ) | (188.3 | ) | |||||||||||||||
Net interest revenue | 284.4 | 287.9 | 287.9 | 287.1 | 284.3 | 287.5 | |||||||||||||||||||||
Provision for credit losses | (89.5 | ) | (89.5 | ) | (23.3 | ) | (23.3 | ) | (45.2 | ) | (45.2 | ) | |||||||||||||||
Net interest revenue, after credit provision | 194.9 | 198.4 | 264.6 | 263.8 | 239.1 | 242.3 | |||||||||||||||||||||
Non-interest income | |||||||||||||||||||||||||||
Rental income on operating leases | 264.0 | 264.1 | 261.1 | 261.0 | 254.3 | 254.3 | |||||||||||||||||||||
Other income | 85.0 | 84.8 | 99.8 | 99.8 | 77.4 | 83.6 | |||||||||||||||||||||
Total non-interest income | 349.0 | 348.9 | 360.9 | 360.8 | 331.7 | 337.9 | |||||||||||||||||||||
Total revenue, net of interest expense and credit provision | 543.9 | 547.3 | 625.5 | 624.6 | 570.8 | 580.2 | |||||||||||||||||||||
Non-interest expenses | |||||||||||||||||||||||||||
Depreciation on operating lease equipment | (61.3 | ) | (61.3 | ) | (63.1 | ) | (63.1 | ) | (66.9 | ) | (66.9 | ) | |||||||||||||||
Maintenance and other operating lease expenses | (49.0 | ) | (48.9 | ) | (50.6 | ) | (50.6 | ) | (56.5 | ) | (56.6 | ) | |||||||||||||||
Operating expenses | (325.1 | ) | (330.1 | ) | (313.9 | ) | (309.3 | ) | (304.3 | ) | (302.8 | ) | |||||||||||||||
Loss on debt extinguishment and deposit redemption | (1.6 | ) | (1.6 | ) | (2.4 | ) | (2.4 | ) | (5.2 | ) | (5.2 | ) | |||||||||||||||
Total other expenses | (437.0 | ) | (441.9 | ) | (430.0 | ) | (425.4 | ) | (432.9 | ) | (431.5 | ) | |||||||||||||||
Income from continuing operations before provision for income taxes | 106.9 | 105.4 | 195.5 | 199.2 | 137.9 | 148.7 | |||||||||||||||||||||
Provision for income taxes | (45.0 | ) | (44.4 | ) | (109.8 | ) | (111.2 | ) | (56.8 | ) | (54.5 | ) | |||||||||||||||
Income from continuing operations before attribution of noncontrolling interests | 61.9 | 61.0 | 85.7 | 88.0 | 81.1 | 94.2 | |||||||||||||||||||||
Income from continuing operations | 61.9 | 61.0 | 85.7 | 88.0 | 81.1 | 94.2 | |||||||||||||||||||||
Discontinued operations | |||||||||||||||||||||||||||
Income (loss) from discontinued operations, net of taxes | $ | 85.0 | $ | 85.0 | $ | (71.6 | ) | $ | (71.0 | ) | $ | 51.7 | $ | 37.3 | |||||||||||||
Net income | $ | 146.9 | $ | 146.0 | $ | 14.1 | $ | 17.0 | $ | 132.8 | $ | 131.5 | |||||||||||||||
Basic income per common share | |||||||||||||||||||||||||||
Income from continuing operations | $ | 0.31 | $ | 0.30 | $ | 0.42 | $ | 0.43 | $ | 0.40 | $ | 0.47 | |||||||||||||||
Income (loss) from discontinued operations, net of taxes | 0.42 | 0.42 | (0.35 | ) | (0.35 | ) | 0.26 | 0.18 | |||||||||||||||||||
Basic income per common share | $ | 0.73 | $ | 0.72 | $ | 0.07 | $ | 0.08 | $ | 0.66 | $ | 0.65 | |||||||||||||||
Diluted income per common share | |||||||||||||||||||||||||||
Income from continuing operations | $ | 0.31 | $ | 0.30 | $ | 0.42 | $ | 0.43 | $ | 0.40 | $ | 0.47 | |||||||||||||||
Income (loss) from discontinued operations, net of taxes | 0.42 | 0.42 | (0.35 | ) | (0.35 | ) | 0.25 | 0.18 | |||||||||||||||||||
Diluted income per common share | $ | 0.73 | $ | 0.72 | $ | 0.07 | $ | 0.08 | $ | 0.65 | $ | 0.65 | |||||||||||||||
Average number of common shares — (thousands) | �� | ||||||||||||||||||||||||||
Basic | 201,394 | 201,394 | 201,893 | 201,893 | 202,036 | 202,036 | |||||||||||||||||||||
Diluted | 202,136 | 202,136 | 202,275 | 202,275 | 202,755 | 202,755 |
Quarter Ended March 31, 2015 | Quarter Ended June 30, 2015 | Quarter Ended September 30, 2015 | Quarter Ended December 31, 2015 | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
As Reported | As Revised | As Reported | As Revised | As Reported | As Revised | As Reported | As Revised | ||||||||||||||||||||||||||||
Interest income | |||||||||||||||||||||||||||||||||||
Interest and fees on loans | $ | 254.8 | $ | 256.2 | $ | 257.2 | $ | 260.6 | $ | 395.6 | $ | 395.1 | $ | 463.7 | $ | 462.1 | |||||||||||||||||||
Other interest and dividends | 8.6 | 8.6 | 8.9 | 8.9 | 23.4 | 23.4 | 30.3 | 30.3 | |||||||||||||||||||||||||||
Interest income | 263.4 | 264.8 | 266.1 | 269.5 | 419.0 | 418.5 | 494.0 | 492.4 | |||||||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||||||||||||||
Interest on borrowings | (105.5 | ) | (102.7 | ) | (99.4 | ) | (96.6 | ) | (103.6 | ) | (103.6 | ) | (98.4 | ) | (98.4 | ) | |||||||||||||||||||
Interest on deposits | (69.0 | ) | (69.0 | ) | (72.2 | ) | (72.2 | ) | (89.7 | ) | (89.7 | ) | (99.2 | ) | (99.2 | ) | |||||||||||||||||||
Interest expense | (174.5 | ) | (171.7 | ) | (171.6 | ) | (168.8 | ) | (193.3 | ) | (193.3 | ) | (197.6 | ) | (197.6 | ) | |||||||||||||||||||
Net interest revenue | 88.9 | 93.1 | 94.5 | 100.7 | 225.7 | 225.2 | 296.4 | 294.8 | |||||||||||||||||||||||||||
Provision for credit losses | (30.4 | ) | (30.4 | ) | (18.7 | ) | (18.7 | ) | (51.9 | ) | (50.3 | ) | (57.6 | ) | (59.2 | ) | |||||||||||||||||||
Net interest revenue, after credit provision | 58.5 | 62.7 | 75.8 | 82.0 | 173.8 | 174.9 | 238.8 | 235.6 | |||||||||||||||||||||||||||
Non-interest income | |||||||||||||||||||||||||||||||||||
Rental income on operating leases | 247.4 | 247.6 | 255.1 | 255.1 | 259.5 | 259.5 | 255.9 | 255.9 | |||||||||||||||||||||||||||
Other income | 56.1 | 51.8 | 57.4 | 51.2 | 31.4 | 24.9 | 18.1 | 21.7 | |||||||||||||||||||||||||||
Total non-interest income | 303.5 | 299.4 | 312.5 | 306.3 | 290.9 | 284.4 | 274.0 | 277.6 | |||||||||||||||||||||||||||
Total revenue, net of interest expense and credit provision | 362.0 | 362.1 | 388.3 | 388.3 | 464.7 | 459.3 | 512.8 | 513.2 | |||||||||||||||||||||||||||
Non-interest expenses | |||||||||||||||||||||||||||||||||||
Depreciation on operating lease equipment | (55.5 | ) | (55.6 | ) | (57.6 | ) | (57.6 | ) | (58.8 | ) | (58.8 | ) | (57.2 | ) | (57.2 | ) | |||||||||||||||||||
Maintenance and other operating lease expenses | (39.6 | ) | (39.6 | ) | (42.6 | ) | (42.6 | ) | (49.0 | ) | (49.0 | ) | (53.9 | ) | (53.9 | ) | |||||||||||||||||||
Operating expenses | (221.0 | ) | (222.6 | ) | (216.7 | ) | (219.2 | ) | (318.3 | ) | (327.5 | ) | (343.9 | ) | (351.8 | ) | |||||||||||||||||||
Loss on debt extinguishment and deposit redemption | – | – | (0.1 | ) | (0.1 | ) | (0.3 | ) | (0.3 | ) | (1.1 | ) | (1.1 | ) | |||||||||||||||||||||
Total other expenses | (316.1 | ) | (317.8 | ) | (317.0 | ) | (319.5 | ) | (426.4 | ) | (435.6 | ) | (456.1 | ) | (464.0 | ) | |||||||||||||||||||
Income from continuing operations before benefit (provision) for income taxes | 45.9 | 44.3 | 71.3 | 68.8 | 38.3 | 23.7 | 56.7 | 49.2 | |||||||||||||||||||||||||||
(Provision) benefit for income taxes | (23.5 | ) | (22.8 | ) | (37.9 | ) | (36.9 | ) | 582.8 | 581.9 | 12.9 | 15.8 | |||||||||||||||||||||||
Income from continuing operations before attribution of noncontrolling interests | 22.4 | 21.5 | 33.4 | 31.9 | 621.1 | 605.6 | 69.6 | 65.0 | |||||||||||||||||||||||||||
Loss attributable to noncontrolling interests, after tax | 0.1 | 0.1 | – | – | – | – | – | – | |||||||||||||||||||||||||||
Income from continuing operations | 22.5 | 21.6 | 33.4 | 31.9 | 621.1 | 605.6 | 69.6 | 65.0 |
Quarter Ended March 31, 2015 | Quarter Ended June 30, 2015 | Quarter Ended September 30, 2015 | Quarter Ended December 31, 2015 | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
As Reported | As Revised | As Reported | As Revised | As Reported | As Revised | As Reported | As Revised | ||||||||||||||||||||||||||||
Discontinued operations | |||||||||||||||||||||||||||||||||||
Income from discontinued operations, net of taxes | $ | 81.2 | $ | 81.1 | $ | 81.9 | $ | 81.9 | $ | 72.0 | $ | 72.0 | $ | 74.9 | $ | 75.0 | |||||||||||||||||||
Net income | $ | 103.7 | $ | 102.7 | $ | 115.3 | $ | 113.8 | $ | 693.1 | $ | 677.6 | $ | 144.5 | $ | 140.0 | |||||||||||||||||||
Basic income per common share | |||||||||||||||||||||||||||||||||||
Income from continuing operations | 0.13 | $ | 0.12 | 0.19 | $ | 0.18 | 3.26 | $ | 3.18 | $ | 0.35 | $ | 0.33 | ||||||||||||||||||||||
Income from discontinued operations, net of taxes | 0.46 | 0.46 | 0.47 | 0.47 | 0.38 | 0.38 | 0.37 | 0.37 | |||||||||||||||||||||||||||
Basic income per common share | 0.59 | $ | 0.58 | 0.66 | $ | 0.65 | 3.64 | $ | 3.56 | $ | 0.72 | $ | 0.70 | ||||||||||||||||||||||
Diluted income per common share | |||||||||||||||||||||||||||||||||||
Income from continuing operations | 0.13 | $ | 0.12 | 0.19 | $ | 0.18 | 3.24 | $ | 3.15 | $ | 0.35 | $ | 0.33 | ||||||||||||||||||||||
Income from discontinued operations, net of taxes | 0.46 | 0.46 | 0.47 | 0.47 | 0.37 | 0.38 | 0.37 | 0.37 | |||||||||||||||||||||||||||
Diluted income per common share | 0.59 | $ | 0.58 | 0.66 | $ | 0.65 | 3.61 | $ | 3.53 | $ | 0.72 | $ | 0.70 | ||||||||||||||||||||||
Average number of common shares — (thousands) | |||||||||||||||||||||||||||||||||||
Basic | 176,260 | 176,260 | 173,785 | 173,785 | 190,557 | 190,557 | 200,987 | 200,987 | |||||||||||||||||||||||||||
Diluted | 177,072 | 177,072 | 174,876 | 174,876 | 191,803 | 191,803 | 201,376 | 201,376 |
Six Months Ended June 30, 2016 | Nine Months Ended September 30, 2016 | Six Months Ended June 30, 2015 | Nine Months Ended September 30, 2015 | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
As Reported | As Revised | As Reported | As Revised | As Reported | As Revised | As Reported | As Revised | ||||||||||||||||||||||||||||
Interest income | |||||||||||||||||||||||||||||||||||
Interest and fees on loans | $ | 896.8 | $ | 899.5 | $ | 1,337.4 | $ | 1,343.4 | $ | 512.0 | $ | 516.8 | $ | 907.6 | $ | 911.9 | |||||||||||||||||||
Other interest and dividends | 62.1 | 62.1 | 94.0 | 94.0 | 17.5 | 17.5 | 40.9 | 40.9 | |||||||||||||||||||||||||||
Interest income | 958.9 | 961.6 | 1,431.4 | 1,437.4 | 529.5 | 534.3 | 948.5 | 952.8 | |||||||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||||||||||||||
Interest on borrowings | (187.6 | ) | (187.7 | ) | (276.4 | ) | (276.5 | ) | (204.9 | ) | (199.3 | ) | (308.5 | ) | (302.9 | ) | |||||||||||||||||||
Interest on deposits | (199.0 | ) | (198.9 | ) | (298.4 | ) | (298.4 | ) | (141.2 | ) | (141.2 | ) | (230.9 | ) | (230.9 | ) | |||||||||||||||||||
Interest expense | (386.6 | ) | (386.6 | ) | (574.8 | ) | (574.9 | ) | (346.1 | ) | (340.5 | ) | (539.4 | ) | (533.8 | ) | |||||||||||||||||||
Net interest revenue | 572.3 | 575.0 | 856.6 | 862.5 | 183.4 | 193.8 | 409.1 | 419.0 | |||||||||||||||||||||||||||
Provision for credit losses | (112.8 | ) | (112.8 | ) | (158.0 | ) | (158.0 | ) | (49.1 | ) | (49.1 | ) | (101.0 | ) | (99.4 | ) | |||||||||||||||||||
Net interest revenue, after credit provision | 459.5 | 462.2 | 698.6 | 704.5 | 134.3 | 144.7 | 308.1 | 319.6 | |||||||||||||||||||||||||||
Non-interest income | |||||||||||||||||||||||||||||||||||
Rental income on operating leases | 525.1 | 525.1 | 779.4 | 779.4 | 502.5 | 502.7 | 762.0 | 762.2 | |||||||||||||||||||||||||||
Other income | 184.8 | 184.6 | 262.2 | 268.2 | 113.5 | 103.0 | 144.9 | 127.9 | |||||||||||||||||||||||||||
Total non-interest income | 709.9 | 709.7 | 1,041.6 | 1,047.6 | 616.0 | 605.7 | 906.9 | 890.1 | |||||||||||||||||||||||||||
Total revenue, net of interest expense and credit provision | 1,169.4 | 1,171.9 | 1,740.2 | 1,752.1 | 750.3 | 750.4 | 1,215.0 | 1,209.7 | |||||||||||||||||||||||||||
Non-interest expenses | |||||||||||||||||||||||||||||||||||
Depreciation on operating lease equipment | (124.4 | ) | (124.4 | ) | (191.3 | ) | (191.3 | ) | (113.1 | ) | (113.2 | ) | (171.9 | ) | (172.0 | ) | |||||||||||||||||||
Maintenance and other operating lease expenses | (99.6 | ) | (99.5 | ) | (156.1 | ) | (156.1 | ) | (82.2 | ) | (82.2 | ) | (131.2 | ) | (131.2 | ) | |||||||||||||||||||
Operating expenses | (639.0 | ) | (639.4 | ) | (943.3 | ) | (942.2 | ) | (437.7 | ) | (441.8 | ) | (756.0 | ) | (769.3 | ) | |||||||||||||||||||
Loss on debt extinguishment and deposit redemption | (4.0 | ) | (4.0 | ) | (9.2 | ) | (9.2 | ) | (0.1 | ) | (0.1 | ) | (0.4 | ) | (0.4 | ) | |||||||||||||||||||
Total other expenses | (867.0 | ) | (867.3 | ) | (1,299.9 | ) | (1,298.8 | ) | (633.1 | ) | (637.3 | ) | (1,059.5 | ) | (1,072.9 | ) | |||||||||||||||||||
Income from continuing operations before benefit (provision) for income taxes | 302.4 | 304.6 | 440.3 | 453.3 | 117.2 | 113.1 | 155.5 | 136.8 | |||||||||||||||||||||||||||
(Provision) benefit for income taxes | (154.8 | ) | (155.6 | ) | (211.6 | ) | (210.1 | ) | (61.4 | ) | (59.7 | ) | 521.4 | 522.2 | |||||||||||||||||||||
Income from continuing operations before attribution of noncontrolling interests | 147.6 | 149.0 | 228.7 | 243.2 | 55.8 | 53.4 | 676.9 | 659.0 | |||||||||||||||||||||||||||
Loss attributable to noncontrolling interests, after tax | – | – | – | – | 0.1 | 0.1 | 0.1 | 0.1 | |||||||||||||||||||||||||||
Income from continuing operations | 147.6 | 149.0 | 228.7 | 243.2 | 55.9 | 53.5 | 677.0 | 659.1 |
Six Months Ended June 30, 2016 | Nine Months Ended September 30, 2016 | Six Months Ended June 30, 2015 | Nine Months Ended September 30, 2015 | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
As Reported | As Revised | As Reported | As Revised | As Reported | As Revised | As Reported | As Revised | ||||||||||||||||||||||||||||
Discontinued operations | |||||||||||||||||||||||||||||||||||
Income from discontinued operations, net of taxes | $ | 13.4 | $ | 14.0 | $ | 65.1 | $ | 51.3 | $ | 163.1 | $ | 163.0 | $ | 235.1 | $ | 235.0 | |||||||||||||||||||
Net income | $ | 161.0 | $ | 163.0 | $ | 293.8 | $ | 294.5 | 219.0 | 216.5 | 912.1 | $ | 894.1 | ||||||||||||||||||||||
Basic income per common share | |||||||||||||||||||||||||||||||||||
Income from continuing operations | $ | 0.73 | $ | 0.74 | $ | 1.14 | $ | 1.21 | $ | 0.32 | $ | 0.31 | $ | 3.76 | $ | 3.66 | |||||||||||||||||||
Income from discontinued operations, net of taxes | 0.07 | 0.07 | 0.32 | 0.25 | 0.93 | 0.93 | 1.30 | 1.30 | |||||||||||||||||||||||||||
Basic income per common share | $ | 0.80 | $ | 0.81 | $ | 1.46 | $ | 1.46 | $ | 1.25 | $ | 1.24 | $ | 5.06 | $ | 4.96 | |||||||||||||||||||
Diluted income per common share | |||||||||||||||||||||||||||||||||||
Income from continuing operations | $ | 0.73 | $ | 0.74 | $ | 1.13 | $ | 1.21 | $ | 0.32 | $ | 0.30 | $ | 3.73 | $ | 3.63 | |||||||||||||||||||
Income from discontinued operations, net of taxes | 0.07 | 0.07 | 0.32 | 0.25 | 0.92 | 0.93 | 1.30 | 1.30 | |||||||||||||||||||||||||||
Diluted income per common share | $ | 0.80 | $ | 0.81 | $ | 1.45 | $ | 1.46 | $ | 1.24 | $ | 1.23 | $ | 5.03 | $ | 4.93 | |||||||||||||||||||
Average number of common shares — (thousands) | |||||||||||||||||||||||||||||||||||
Basic | 201,647 | 201,647 | 201,775 | 201,775 | 175,019 | 175,019 | 180,300 | 180,300 | |||||||||||||||||||||||||||
Diluted | 202,208 | 202,208 | 202,388 | 202,388 | 175,971 | 175,971 | 181,350 | 181,350 |
• | Presentation of foreign exchange movement in the statement of cash flows. Revisions were made to reclassify the impact of foreign exchange rate movement which had previously been recorded inChange in loans, net within the investing section, to reflect this activity as reconciling from Net income to cash flows from operations, particularly movements relating toIncreases (decreases) in other assets andother liabilities. Corrections were also recorded to reflect foreign exchange movements impactingRepayments of term debt andNet increase in deposits within the financing activities section. In addition, prior periods have been revised to separately disclose theEffect of exchange rate changes on cash and cash equivalents. |
• | Inconsistently recording cash flows for lending activities based on original intent in the operations section. Instances were identified, in which activities related to loan syndication and loans designated as held for sale, remained in the investing section. For syndication activity, the original intent is to resell the loan; therefore, that activity should have been recorded in(Increase) decrease in finance receivables held for sale in the operations section, but the activity was recorded withinChange in loans, net andProceeds from asset and receivable sales within the investing section. In addition, when certain portfolios were designated as held for sale, only loan activities subsequent to the held for sale designation date (for example, new loan extensions and collections on the new loans), should have been recorded in(Increase) decrease in finance receivables held for sale in the operations section, however, all activity was recorded in the operations section. Amounts related to balances recorded prior to the designation as held for sale should have been recorded inChange in Loans, net. |
• | The remaining errors related to various misclassifications between the changes in other assets or other liabilities line items in the operations section and various investing or financing lines. |
2016 | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months Ended March 31 | Six Months Ended June 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||
As Reported | As Revised | As Reported | As Revised | As Reported | As Revised | ||||||||||||||||||||||
Cash Flows From Operations | |||||||||||||||||||||||||||
Net income | $ | 146.9 | $ | 146.0 | $ | 161.0 | $ | 163.0 | $ | 293.8 | $ | 294.5 | |||||||||||||||
Adjustments to reconcile net income to net cash flows from operations: | |||||||||||||||||||||||||||
Provision for credit losses | 99.3 | 99.3 | 127.4 | 127.4 | 173.6 | 173.6 | |||||||||||||||||||||
Net depreciation, amortization and accretion | 176.9 | 204.0 | 397.2 | 402.1 | 598.1 | 603.0 | |||||||||||||||||||||
Net gains on equipment, receivable and investment sales | (8.5 | ) | (4.9 | ) | (40.6 | ) | (43.4 | ) | (58.6 | ) | (68.8 | ) | |||||||||||||||
Provision for deferred income taxes | 67.3 | 66.7 | 83.1 | 87.9 | 143.1 | 136.4 | |||||||||||||||||||||
(Increase) decrease in finance receivables held for sale | 347.1 | 233.4 | 244.3 | 244.3 | 168.1 | 168.1 | |||||||||||||||||||||
Goodwill Impairment | – | – | – | 4.2 | – | 4.2 | |||||||||||||||||||||
Reimbursement of OREO expense from FDIC | 4.6 | 0.9 | 4.4 | 4.4 | 3.1 | 3.1 | |||||||||||||||||||||
(Increase) decrease in other assets | (77.2 | ) | (44.2 | ) | (4.3 | ) | 20.8 | 166.0 | 173.1 | ||||||||||||||||||
(Decrease) increase in accrued liabilities and payables | (190.4 | ) | (301.6 | ) | 43.3 | (31.0 | ) | (5.8 | ) | (68.6 | ) | ||||||||||||||||
Net cash flows provided by operations | 566.0 | 399.6 | 1,015.8 | 979.7 | 1,481.4 | 1,418.6 | |||||||||||||||||||||
Cash Flows From Investing Activities | |||||||||||||||||||||||||||
Changes in loans, net | (437.7 | ) | (137.7 | ) | (47.4 | ) | 94.5 | 316.8 | 520.9 | ||||||||||||||||||
Purchases of investment securities | (492.5 | ) | (494.9 | ) | (1,852.8 | ) | (1,855.2 | ) | (3,344.5 | ) | (3,347.3 | ) | |||||||||||||||
Proceeds from maturities of investment securities | 541.5 | 541.5 | 1,624.1 | 1,624.1 | 2,813.3 | 2,835.8 | |||||||||||||||||||||
Proceeds from asset and receivable sales | 455.9 | 422.1 | 838.5 | 784.4 | 1,182.5 | 1,094.9 | |||||||||||||||||||||
Purchases of assets to be leased and other equipment | (298.4 | ) | (362.0 | ) | (899.0 | ) | (935.8 | ) | (1,382.8 | ) | (1,420.2 | ) | |||||||||||||||
Net increase in short-term factoring receivables | (209.9 | ) | (209.9 | ) | (129.1 | ) | (129.1 | ) | (288.1 | ) | (288.1 | ) | |||||||||||||||
Purchases of restricted stock | – | – | – | – | – | – | |||||||||||||||||||||
Proceeds from redemption of restricted stock | 2.2 | 2.2 | 2.2 | 2.2 | 32.3 | 9.8 | |||||||||||||||||||||
Payments to the FDIC under loss share agreements | (3.1 | ) | (1.1 | ) | (2.1 | ) | (2.1 | ) | (2.2 | ) | (2.2 | ) | |||||||||||||||
Proceeds from the FDIC under loss share agreements and participation agreements | 25.4 | 27.1 | 59.8 | 59.8 | 83.9 | 83.9 | |||||||||||||||||||||
Proceeds from sales of other real estate owned, net of repurchases | 36.6 | 36.6 | 72.7 | 72.7 | 103.3 | 103.3 | |||||||||||||||||||||
Acquisition, net of cash received | – | – | – | – | – | – | |||||||||||||||||||||
Change in restricted cash | 7.6 | 7.6 | 26.7 | 26.7 | (22.4 | ) | (22.4 | ) | |||||||||||||||||||
Net cash flows used in investing activities | (372.4 | ) | (168.5 | ) | (306.4 | ) | (257.8 | ) | (507.9 | ) | (431.6 | ) |
2016 | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months Ended March 31 | Six Months Ended June 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||
As Reported | As Revised | As Reported | As Revised | As Reported | As Revised | ||||||||||||||||||||||
Cash Flows From Financing Activities | |||||||||||||||||||||||||||
Proceeds from the issuance of term debt | $ | 7.2 | $ | 4.1 | $ | 4.2 | $ | 8.5 | $ | 2.7 | $ | 10.1 | |||||||||||||||
Repayments of term debt | (470.2 | ) | (502.3 | ) | (905.2 | ) | (915.3 | ) | (1,320.0 | ) | (1,332.2 | ) | |||||||||||||||
Proceeds from the issuance of FHLB Debt | 551.0 | 551.0 | 1,645.5 | 1,645.5 | 1,645.5 | 1,645.5 | |||||||||||||||||||||
Repayments of FHLB Debt | (552.3 | ) | (552.3 | ) | (1,768.0 | ) | (1,768.0 | ) | (2,324.9 | ) | (2,324.9 | ) | |||||||||||||||
Net increase in deposits | 114.2 | 114.2 | 102.6 | 102.6 | 80.9 | 91.5 | |||||||||||||||||||||
Collection of security deposits and maintenance funds | 70.1 | 70.1 | 168.5 | 168.5 | 270.9 | 260.3 | |||||||||||||||||||||
Use of security deposits and maintenance funds | (30.8 | ) | (30.8 | ) | (58.3 | ) | (58.3 | ) | (118.2 | ) | (118.2 | ) | |||||||||||||||
Repurchase of common stock | – | – | – | – | – | – | |||||||||||||||||||||
Dividends paid | (30.6 | ) | (30.6 | ) | (61.5 | ) | (61.5 | ) | (92.3 | ) | (92.3 | ) | |||||||||||||||
Purchase of non-controlling interest | – | – | – | – | – | – | |||||||||||||||||||||
Payments on affordable housing investment credits | (4.3 | ) | (4.3 | ) | (8.1 | ) | (8.1 | ) | (8.4 | ) | (8.4 | ) | |||||||||||||||
Net cash flows used in financing activities | (345.7 | ) | (380.9 | ) | (880.3 | ) | (886.1 | ) | (1,863.8 | ) | (1,868.6 | ) | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | – | (2.3 | ) | – | (6.7 | ) | – | (8.7 | ) | ||||||||||||||||||
Decrease in unrestricted cash and cash equivalents | (152.1 | ) | (152.1 | ) | (170.9 | ) | (170.9 | ) | (890.3 | ) | (890.3 | ) | |||||||||||||||
Unrestricted cash and cash equivalents, beginning of period | 7,470.6 | 7,470.6 | 7,470.6 | 7,470.6 | 7,470.6 | 7,470.6 | |||||||||||||||||||||
Unrestricted cash and cash equivalents, end of period | $ | 7,318.5 | $ | 7,318.5 | $ | 7,299.7 | $ | 7,299.7 | $ | 6,580.3 | $ | 6,580.3 | |||||||||||||||
Supplementary Cash Flow Disclosure | |||||||||||||||||||||||||||
Interest paid | $ | (335.9 | ) | $ | (338.0 | ) | $ | (579.9 | ) | (581.3 | ) | $ | (902.9 | ) | $ | (915.9 | ) | ||||||||||
Federal, foreign, state and local income taxes (paid) collected, net | (0.2 | ) | (0.2 | ) | (6.4 | ) | (6.4 | ) | 49.9 | 49.9 | |||||||||||||||||
Supplementary Non Cash Flow Disclosure | |||||||||||||||||||||||||||
Transfer of assets from held for investment to held for sale | 833.4 | 833.4 | 1,528.3 | 1,528.3 | 2,020.5 | 2,020.5 | |||||||||||||||||||||
Transfer of assets from held for sale to held for investment | 61.1 | 61.1 | 76.8 | 76.8 | 91.0 | 91.0 | |||||||||||||||||||||
Deposits on flight equipment purchases applied to acquisition of flight equipment, capitalized interest and buyer furnished equipment | – | 29.4 | 179.9 | 179.9 | 210.4 | 210.4 | |||||||||||||||||||||
Transfers of assets from held for investment to OREO | 19.9 | 19.9 | 45.3 | 45.3 | 71.6 | 71.6 | |||||||||||||||||||||
Issuance of common stock as consideration |
2015 | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months Ended March 31 | Six Months Ended June 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||
As Reported | As Revised | As Reported | As Revised | As Reported | As Revised | ||||||||||||||||||||||
Cash Flows From Operations | |||||||||||||||||||||||||||
Net income | $ | 103.7 | $ | 102.7 | $ | 219.0 | $ | 216.5 | $ | 912.1 | $ | 894.1 | |||||||||||||||
Adjustments to reconcile net income to net cash flows from operations: | |||||||||||||||||||||||||||
Provision for credit losses | 34.6 | 34.6 | 53.0 | 53.0 | 102.9 | 102.9 | |||||||||||||||||||||
Net depreciation, amortization and accretion | 165.5 | 196.0 | 388.5 | 388.5 | 582.1 | 582.1 | |||||||||||||||||||||
Net gains on equipment, receivable and investment sales | (29.2 | ) | (25.9 | ) | (45.6 | ) | (41.4 | ) | (63.2 | ) | (45.8 | ) | |||||||||||||||
Provision for deferred income taxes | 21.2 | 20.6 | 53.0 | 51.5 | (563.6 | ) | (564.4 | ) | |||||||||||||||||||
(Increase) decrease in finance receivables held for sale | (74.7 | ) | (74.7 | ) | (148.8 | ) | (148.8 | ) | (117.1 | ) | (119.8 | ) | |||||||||||||||
Goodwill Impairment | – | – | – | – | 29.0 | 15.0 | |||||||||||||||||||||
Reimbursement of OREO expense from FDIC | – | – | – | – | 2.2 | 2.2 | |||||||||||||||||||||
(Increase) decrease in other assets | (46.8 | ) | (86.6 | ) | 54.6 | 9.7 | 9.7 | (95.6 | ) | ||||||||||||||||||
(Decrease) increase in accrued liabilities and payables | (41.7 | ) | 24.7 | (169.4 | ) | (49.9 | ) | (100.4 | ) | 145.4 | |||||||||||||||||
Net cash flows provided by operations | 132.6 | 191.4 | 404.3 | 479.1 | 793.7 | 916.1 | |||||||||||||||||||||
Cash Flows From Investing Activities | |||||||||||||||||||||||||||
Changes in loans, net | (52.3 | ) | (188.3 | ) | (720.7 | ) | (791.3 | ) | (1,134.7 | ) | (1,305.7 | ) | |||||||||||||||
Purchases of investment securities | (3,094.3 | ) | (3,142.7 | ) | (5,061.6 | ) | (5,217.1 | ) | (6,964.8 | ) | (6,925.8 | ) | |||||||||||||||
Proceeds from maturities of investment securities | 3,482.3 | 3,535.9 | 4,814.6 | 4,980.2 | 7,139.2 | 7,139.2 | |||||||||||||||||||||
Proceeds from asset and receivable sales | 544.9 | 537.5 | 781.9 | 760.2 | 1,427.7 | 1,373.9 | |||||||||||||||||||||
Purchases of assets to be leased and other equipment | (408.2 | ) | (445.5 | ) | (973.6 | ) | (980.9 | ) | (1,859.1 | ) | (1,862.2 | ) | |||||||||||||||
Net increase in short-term factoring receivables | (112.3 | ) | (112.3 | ) | 91.7 | 91.7 | (32.3 | ) | (32.3 | ) | |||||||||||||||||
Purchases of restricted stock | – | – | (2.7 | ) | (2.7 | ) | (128.9 | ) | (128.9 | ) | |||||||||||||||||
Proceeds from redemption of restricted stock | 1.7 | 1.7 | – | – | 20.0 | 20.0 | |||||||||||||||||||||
Payments to the FDIC under loss share agreements | – | – | – | – | (17.4 | ) | (17.4 | ) | |||||||||||||||||||
Proceeds from the FDIC under loss share agreements and participation agreements | – | – | – | – | 11.3 | 11.3 | |||||||||||||||||||||
Proceeds from sales of other real estate owned, net of repurchases | – | – | – | – | 24.2 | 24.2 | |||||||||||||||||||||
Acquisition, net of cash received | – | – | – | – | 2,521.2 | 2,521.2 | |||||||||||||||||||||
Change in restricted cash | 143.8 | 143.8 | 167.4 | 167.4 | 151.1 | 151.1 | |||||||||||||||||||||
Net cash flows provided by (used in) investing activities | 505.6 | 330.1 | (903.0 | ) | (992.5 | ) | 1,157.5 | 968.6 |
2015 | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months Ended March 31 | Six Months Ended June 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||
As Reported | As Revised | As Reported | As Revised | As Reported | As Revised | ||||||||||||||||||||||
Cash Flows From Financing Activities | |||||||||||||||||||||||||||
Proceeds from the issuance of term debt | 519.8 | 519.8 | 956.8 | 956.8 | 1,606.5 | 1,606.5 | |||||||||||||||||||||
Repayments of term debt | (2,126.9 | ) | (2,074.5 | ) | (3,020.0 | ) | (2,814.8 | ) | (3,700.3 | ) | (3,634.7 | ) | |||||||||||||||
Proceeds from the issuance of FHLB Debt | – | – | 64.1 | 64.1 | 5,164.1 | 5,164.1 | |||||||||||||||||||||
Repayments of FHLB Debt | (167.9 | ) | (167.9 | ) | (3.5 | ) | (171.4 | ) | (5,168.8 | ) | (5,168.8 | ) | |||||||||||||||
Net increase in deposits | 908.4 | 916.8 | 1,412.5 | 1,421.4 | 1,943.1 | 1,960.8 | |||||||||||||||||||||
Collection of security deposits and maintenance funds | 255.5 | 74.6 | 137.7 | 137.7 | 236.1 | 236.1 | |||||||||||||||||||||
Use of security deposits and maintenance funds | (316.7 | ) | (29.3 | ) | (69.0 | ) | (69.0 | ) | (127.1 | ) | (90.5 | ) | |||||||||||||||
Repurchase of common stock | (331.7 | ) | (331.7 | ) | (392.7 | ) | (392.7 | ) | (531.8 | ) | (531.8 | ) | |||||||||||||||
Dividends paid | (27.1 | ) | (27.1 | ) | (53.6 | ) | (53.6 | ) | (84.4 | ) | (84.4 | ) | |||||||||||||||
Purchase of non-controlling interest | (20.5 | ) | (20.5 | ) | (20.5 | ) | (20.5 | ) | (20.5 | ) | (20.5 | ) | |||||||||||||||
Payments on affordable housing investment credits | – | – | – | – | (0.2 | ) | (0.2 | ) | |||||||||||||||||||
Net cash flows used in financing activities | (1,307.1 | ) | (1,139.8 | ) | (988.2 | ) | (942.0 | ) | (683.3 | ) | (563.4 | ) | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | – | (50.6 | ) | – | (31.5 | ) | – | (53.4 | ) | ||||||||||||||||||
(Decrease) increase in unrestricted cash and cash equivalents | (668.9 | ) | (668.9 | ) | (1,486.9 | ) | (1,486.9 | ) | 1,267.9 | 1,267.9 | |||||||||||||||||
Unrestricted cash and cash equivalents, beginning of period | 6,155.5 | 6,155.5 | 6,155.5 | 6,155.5 | 6,155.5 | 6,155.5 | |||||||||||||||||||||
Unrestricted cash and cash equivalents, end of period | $ | 5,486.6 | $ | 5,486.6 | $ | 4,668.6 | $ | 4,668.6 | $ | 7,423.4 | $ | 7,423.4 | |||||||||||||||
Supplementary Cash Flow Disclosure | |||||||||||||||||||||||||||
Interest paid | $ | (324.3 | ) | $ | (331.2 | ) | $ | (538.3 | ) | $ | (539.2 | ) | $ | (859.3 | ) | $ | (867.8 | ) | |||||||||
Federal, foreign, state and local income taxes (paid) collected, net | (14.0 | ) | (14.0 | ) | (17.7) | (17.7 | ) | (26.4 | ) | (26.4 | ) | ||||||||||||||||
Supplementary Non Cash Flow Disclosure | |||||||||||||||||||||||||||
Transfer of assets from held for investment to held for sale | 239.4 | 241.7 | 397.7 | 397.7 | 2,049.0 | 2,049.0 | |||||||||||||||||||||
Transfer of assets from held for sale to held for investment | 0.7 | 0.7 | 43.5 | 43.5 | 93.1 | 93.1 | |||||||||||||||||||||
Deposits on flight equipment purchases applied to acquisition of flight equipment, capitalized interest and buyer furnished equipment | – | 99.8 | 176.1 | 176.1 | 288.1 | 288.1 | |||||||||||||||||||||
Transfers of assets from held for investment to OREO | – | – | – | – | 26.4 | 26.4 | |||||||||||||||||||||
Issuance of common stock as consideration | – | – | – | – | 1,462.0 | 1,462.0 |
- | $25 million in sales taxes related to our Commercial Banking segment that should have been recorded in 2015 and 2014, and |
- | a write-off of $8 million of servicing advances, mostly related to the 2015. |
December 31, 2015 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
As Reported | As Revised | ||||||||||
Assets | |||||||||||
Total cash and deposits | $ | 7,652.4 | $ | 7,652.4 | |||||||
Investment securities | 2,953.7 | 2,953.7 | |||||||||
Assets held for sale(1) | 2,057.7 | 2,057.7 | |||||||||
Loans | 30,521.9 | 30,518.7 | |||||||||
Allowance for loan losses | (347.0 | ) | (347.0 | ) | |||||||
Total loans, net of allowance for loan losses(1) | 30,174.9 | 30,171.7 | |||||||||
Operating lease equipment, net(1) | 6,851.7 | 6,851.7 | |||||||||
Indemnification assets | 414.8 | 409.1 | |||||||||
Unsecured counterparty receivable | 537.8 | 537.8 | |||||||||
Goodwill | 1,063.2 | 1,063.2 | |||||||||
Intangible assets | 166.1 | 166.1 | |||||||||
Other assets | 2,469.6 | 2,468.9 | |||||||||
Assets of discontinued operations | 13,059.6 | 13,059.6 | |||||||||
Total Assets | $ | 67,401.5 | $ | 67,391.9 | |||||||
Liabilities | |||||||||||
Deposits | $ | 32,761.4 | $ | 32,761.4 | |||||||
Credit balances of factoring clients | 1,344.0 | 1,344.0 | |||||||||
Other liabilities | 1,665.2 | 1,689.0 | |||||||||
Borrowings | 16,350.3 | 16,350.3 | |||||||||
Liabilities of discontinued operations | 4,302.0 | 4,302.0 | |||||||||
Total Liabilities | $ | 56,422.9 | $ | 56,446.7 | |||||||
Stockholders’ Equity | |||||||||||
Common stock | 2.0 | 2.0 | |||||||||
Paid-in capital | 8,718.1 | 8,718.1 | |||||||||
Retained earnings | 2,557.4 | 2,524.0 | |||||||||
Accumulated other comprehensive loss | (142.1 | ) | (142.1 | ) | |||||||
Treasury stock | (157.3 | ) | (157.3 | ) | |||||||
Total Common Stockholders’ Equity | 10,978.1 | 10,944.7 | |||||||||
Noncontrolling minority interests | 0.5 | 0.5 | |||||||||
Total Equity | 10,978.6 | 10,945.2 | |||||||||
Total Liabilities and Equity | $ | 67,401.5 | $ | 67,391.9 |
(1) | The following table presents information on assets and liabilities related to Variable Interest Entities (VIEs) that are consolidated by the Company. The difference between VIE total assets and total liabilities represents the Company’s interests in those entities, which were eliminated in consolidation. The assets of the consolidated VIEs will be used to settle the liabilities of those entities and, except for the Company’s interest in the VIEs, are not available to the creditors of CIT or any affiliates of CIT. |
Assets | |||||||||||
Cash and interest bearing deposits, restricted | $ | 276.9 | $ | 276.9 | |||||||
Assets held for sale | 279.7 | 279.7 | |||||||||
Total loans, net of allowance for loan losses | 2,217.5 | 2,217.5 | |||||||||
Operating lease equipment, net | 797.2 | 797.2 | |||||||||
Other | 11.2 | 11.2 | |||||||||
Assets of discontinued operations | 3,227.2 | 3,402.4 | |||||||||
Total Assets | $ | 6,809.7 | $ | 6,984.9 | |||||||
Liabilities | |||||||||||
Beneficial interests issued by consolidated VIEs (classified as long-term borrowings) | $ | 1,948.7 | $ | 1,948.7 | |||||||
Liabilities of discontinued operations | 2,082.1 | 2,082.1 | |||||||||
Total Liabilities | $ | 4,030.8 | $ | 4,030.8 |
Years Ended December 31, | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2015 | 2014 | ||||||||||||||||||
As Reported | As Revised | As Reported | As Revised | ||||||||||||||||
Interest income | |||||||||||||||||||
Interest and fees on loans | $ | 1,371.3 | $ | 1,374.0 | $ | 1,115.8 | $ | 1,120.1 | |||||||||||
Other interest and dividends | 71.2 | 71.2 | 35.5 | 35.5 | |||||||||||||||
Interest income | 1,442.5 | 1,445.2 | 1,151.3 | 1,155.6 | |||||||||||||||
Interest expense | |||||||||||||||||||
Interest on borrowings | (406.9 | ) | (401.3 | ) | (494.5 | ) | (484.1 | ) | |||||||||||
Interest on deposits | (330.1 | ) | (330.1 | ) | (231.0 | ) | (231.0 | ) | |||||||||||
Interest expense | (737.0 | ) | (731.4 | ) | (725.5 | ) | (715.1 | ) | |||||||||||
Net interest revenue | 705.5 | 713.8 | 425.8 | 440.5 | |||||||||||||||
Provision for credit losses | (158.6 | ) | (158.6 | ) | (104.4 | ) | (104.4 | ) | |||||||||||
Net interest revenue, after credit provision | 546.9 | 555.2 | 321.4 | 336.1 | |||||||||||||||
Non-interest income | |||||||||||||||||||
Rental income on operating leases | 1,017.9 | 1,018.1 | 948.1 | 949.6 | |||||||||||||||
Other income | 163.0 | 149.6 | 278.6 | 263.9 | |||||||||||||||
Total non-interest income | 1,180.9 | 1,167.7 | 1,226.7 | 1,213.5 | |||||||||||||||
Total revenue, net of interest expense and credit provision | 1,727.8 | 1,722.9 | 1,548.1 | 1,549.6 | |||||||||||||||
Non-interest expenses | |||||||||||||||||||
Depreciation on operating lease equipment | (229.1 | ) | (229.2 | ) | (228.6 | ) | (229.8 | ) | |||||||||||
Maintenance and other operating lease expenses | (185.1 | ) | (185.1 | ) | (171.7 | ) | (171.7 | ) | |||||||||||
Operating expenses | (1,099.9 | ) | (1,121.1 | ) | (882.4 | ) | (900.1 | ) | |||||||||||
Loss on debt extinguishment and deposit redemption | (1.5 | ) | (1.5 | ) | (3.5 | ) | (3.5 | ) | |||||||||||
Total other expenses | (1,515.6 | ) | (1,536.9 | ) | (1,286.2 | ) | (1,305.1 | ) | |||||||||||
Income from continuing operations before benefit (provision) for income taxes | 212.2 | 186.0 | 261.9 | 244.5 | |||||||||||||||
Benefit for income taxes | 534.3 | 538.0 | 425.6 | 432.4 | |||||||||||||||
Income from continuing operations before attribution of noncontrolling interests | 746.5 | 724.0 | 687.5 | 676.9 | |||||||||||||||
(Income) loss attributable to noncontrolling interests, after tax | 0.1 | 0.1 | (1.2 | ) | (1.2 | ) | |||||||||||||
Income from continuing operations | 746.6 | 724.1 | 686.3 | 675.7 | |||||||||||||||
Discontinued operations | |||||||||||||||||||
Income from discontinued operations, net of taxes | 310.0 | 310.0 | 443.7 | 443.4 | |||||||||||||||
Net (loss) income | $ | 1,056.6 | $ | 1,034.1 | $ | 1,130.0 | $ | 1,119.1 |
Years Ended December 31, | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2015 | 2014 | ||||||||||||||||||
As Reported | As Revised | As Reported | As Revised | ||||||||||||||||
Basic income per common share | |||||||||||||||||||
Income from continuing operations | $ | 4.03 | $ | 3.90 | $ | 3.64 | $ | 3.59 | |||||||||||
Income from discontinued operations, net of taxes | 1.67 | 1.67 | 2.35 | 2.35 | |||||||||||||||
Basic income per common share | $ | 5.70 | $ | 5.57 | $ | 5.99 | $ | 5.94 | |||||||||||
Diluted income per common share | |||||||||||||||||||
Income from continuing operations | $ | 4.01 | $ | 3.89 | $ | 3.63 | $ | 3.57 | |||||||||||
Income from discontinued operations, net of taxes | 1.66 | 1.66 | 2.33 | 2.34 | |||||||||||||||
Diluted income per common share | $ | 5.67 | $ | 5.55 | $ | 5.96 | $ | 5.91 | |||||||||||
Average number of common shares — (thousands) | |||||||||||||||||||
Basic | 185,500 | 185,500 | 188,491 | 188,491 | |||||||||||||||
Diluted | 186,388 | 186,388 | 189,463 | 189,463 |
- | Presentation of foreign exchange movement in the statement of cash flows.Revisions were made to reclassify the impact of foreign exchange rate movement which had previously been recorded inChange in loans, net within the investing section, to reflect this activity as reconciling from Net income to cash flows from operations, particularly movements relating toIncreases (decreases) in other assets and other liabilities. Corrections were also recorded to reflect foreign exchange movements impactingRepayments of term debt andNet increase in deposits within the financing activities section. In addition, prior periods have been revised to separately disclose the Effect of exchange rate changes on cash and cash equivalents. |
- | Reclassification of cash paid on fixed asset purchases. Cash outflows on certain purchases of long term assets were incorrectly reflected in the operating section withinIncrease (decrease) in other assets, which should have been reflected inPurchases of assets to be leased and other equipment in the investing activities section of the statement of cash flows. |
- | Reclassification of accrued rent on operating leases. Changes in accrued rent on operating leases were incorrectly reflected in theChanges in loans, net line item of the investing section. This activity has now been reclassified to theIncrease (decrease) in other assets line item to reflect these changes as reconciling items from Net income to cash flows from operations within the statement of cash flows. |
Year Ended December 31, 2015 | Year Ended December 31, 2014 | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
As Reported | As Revised | As Reported | As Revised | ||||||||||||||||
Cash Flows From Operations | |||||||||||||||||||
Net income | $ | 1,056.6 | $ | 1,034.1 | $ | 1,130.0 | $ | 1,119.1 | |||||||||||
Adjustments to reconcile net income to net cash flows from operations: | |||||||||||||||||||
Provision for credit losses | 160.5 | 160.5 | 100.1 | 100.1 | |||||||||||||||
Net depreciation, amortization and accretion | 783.9 | 783.9 | 973.2 | 973.2 | |||||||||||||||
Net gains on equipment, receivable and investment sales | (12.3 | ) | 5.1 | (348.4 | ) | (338.4 | ) | ||||||||||||
Provision for deferred income taxes | (569.2 | ) | (572.9 | ) | (426.7 | ) | (433.5 | ) | |||||||||||
(Increase) decrease in finance receivables held for sale | (261.5 | ) | (251.3 | ) | (161.9 | ) | (161.9 | ) | |||||||||||
Goodwill Impairment | 29.0 | 15.0 | – | – | |||||||||||||||
Reimbursement of OREO expense from FDIC | 7.2 | 7.2 | – | – | |||||||||||||||
(Increase) decrease in other assets | 65.9 | 53.3 | (106.5 | ) | (179.2 | ) | |||||||||||||
(Decrease) increase in accrued liabilities and payables | (408.2 | ) | (67.3 | ) | 32.9 | 299.0 | |||||||||||||
Net cash flows provided by operations | 851.9 | 1,167.6 | 1,192.7 | 1,378.4 | |||||||||||||||
Cash Flows From Investing Activities | |||||||||||||||||||
Changes in loans, net | (1,475.3 | ) | (1,759.2 | ) | (1,703.3 | ) | (1,862.9 | ) | |||||||||||
Purchases of investment securities | (8,051.5 | ) | (8,316.3 | ) | (10,022.8 | ) | (10,024.3 | ) | |||||||||||
Proceeds from maturities of investment securities | 8,963.2 | 9,226.6 | 10,461.2 | 10,461.2 | |||||||||||||||
Proceeds from asset and receivable sales | 2,328.8 | 2,252.4 | 3,692.4 | 3,688.1 | |||||||||||||||
Purchases of assets to be leased and other equipment | (3,052.5 | ) | (3,088.7 | ) | (3,028.9 | ) | (3,058.3 | ) | |||||||||||
Net increase in short-term factoring receivables | 124.7 | 124.7 | (8.0 | ) | (8.0 | ) | |||||||||||||
Purchases of restricted stock | (128.9 | ) | (128.9 | ) | (5.9 | ) | (5.9 | ) | |||||||||||
Proceeds from redemption of restricted stock | 20.3 | 20.3 | 2.4 | 2.4 | |||||||||||||||
Payments to the FDIC under loss share agreements | (18.1 | ) | (18.1 | ) | – | – | |||||||||||||
Proceeds from the FDIC under loss share agreements and participation agreements | 33.7 | 33.7 | – | – | |||||||||||||||
Proceeds from sales of other real estate owned, net of repurchases | 60.8 | 60.8 | – | – | |||||||||||||||
Acquisition, net of cash received | 2,521.2 | 2,521.2 | (448.6 | ) | (448.6 | ) | |||||||||||||
Change in restricted cash | 156.7 | 156.7 | 93.8 | 93.8 | |||||||||||||||
Net cash flows provided by (used in) investing activities | 1,483.1 | 1,085.2 | (967.7 | ) | (1,162.5 | ) | |||||||||||||
Cash Flows From Financing Activities | |||||||||||||||||||
Proceeds from the issuance of term debt | 1,626.9 | 1,626.9 | 3,871.5 | 3,875.2 | |||||||||||||||
Repayments of term debt | (4,417.7 | ) | (4,325.3 | ) | (5,842.3 | ) | (5,762.9 | ) | |||||||||||
Proceeds from the issuance of FHLB Debt | 5,964.1 | 5,964.1 | 308.6 | 308.6 | |||||||||||||||
Repayments of FHLB Debt | (6,070.2 | ) | (6,070.2 | ) | (88.6 | ) | (88.6 | ) | |||||||||||
Net increase in deposits | 2,402.2 | 2,419.2 | 3,301.8 | 3,310.6 | |||||||||||||||
Collection of security deposits and maintenance funds | 330.9 | 330.9 | 332.2 | 332.2 | |||||||||||||||
Use of security deposits and maintenance funds | (184.1 | ) | (147.5 | ) | (163.0 | ) | (163.0 | ) | |||||||||||
Repurchase of common stock | (531.8 | ) | (531.8 | ) | (775.5 | ) | (775.5 | ) | |||||||||||
Dividends paid | (114.9 | ) | (114.9 | ) | (95.3 | ) | (95.3 | ) | |||||||||||
Purchase of non-controlling interest | (20.5 | ) | (20.5 | ) | – | – | |||||||||||||
Payments on affordable housing investment credits | (4.8 | ) | (4.8 | ) | – | – | |||||||||||||
Net cash flows (used in) provided by financing activities | (1,019.9 | ) | (873.9 | ) | 849.4 | 941.3 |
Year Ended December 31, 2015 | Year Ended December 31, 2014 | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
As Reported | As revised | As reported | As revised | ||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | $ | – | $ | (63.8 | ) | $ | – | $ | (82.8 | ) | |||||||||
Increase in unrestricted cash and cash equivalents | 1,315.1 | 1,315.1 | 1,074.4 | 1,074.4 | |||||||||||||||
Unrestricted cash and cash equivalents, beginning of period | 6,155.5 | 6,155.5 | 5,081.1 | 5,081.1 | |||||||||||||||
Unrestricted cash and cash equivalents, end of period | $ | 7,470.6 | $ | 7,470.6 | $ | 6,155.5 | $ | 6,155.5 | |||||||||||
Supplementary Cash Flow Disclosure | |||||||||||||||||||
Interest paid | $ | (1,110.0 | ) | $ | (1,112.0 | ) | $ | (1,049.5 | ) | $ | (1,075.6 | ) | |||||||
Federal, foreign, state and local income taxes (paid) collected, net | (9.5 | ) | (9.5 | ) | (21.6 | ) | (21.6 | ) | |||||||||||
Supplementary Non Cash Flow Disclosure | |||||||||||||||||||
Transfer of assets from held for investment to held for sale | 3,039.4 | 3,039.4 | 2,671.0 | 2,671.0 | |||||||||||||||
Transfer of assets from held for sale to held for investment | 208.7 | 208.7 | 64.9 | 64.9 | |||||||||||||||
Deposits on flight equipment purchases applied to acquisition of flight equipment, capitalized interest and buyer furnished equipment | 554.2 | 554.2 | 589.4 | 589.4 | |||||||||||||||
Transfers of assets from held for investment to OREO | 65.8 | 65.8 | – | – | |||||||||||||||
Issuance of common stock as consideration | 1,462.0 | 1,462.0 | – | – |
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A. Controls and Procedures
1. | Home Equity Conversion Mortgages (HECM) Interest Curtailment Reserve: |
I) | Key judgments and assumptions developed from loan file reviews or other historical experience are reasonably determined, valid and authorized; |
II) | Data used in the estimation process is complete and accurate; and |
III) | Assumptions, judgments, and methodology continue to be appropriate. |
2. | Information Technology General Controls (“ITGCs”): |
I) | Program change management controls to ensure that information technology program and data changes, or changes to queries and logic used to generate key reports used by management affecting financial Information Technology (“IT”) applications and underlying accounting records are identified, tested, authorized and implemented appropriately; |
II) | User access controls to ensure appropriate segregation of duties and access to financial applications and data is adequately restricted to appropriate Company personnel; and |
III) | Computer operations controls to ensure that privileges are appropriately granted, and data uploads and transfers are authorized and monitored. |
1. | Home Equity Conversion Mortgages (HECM) Interest Curtailment Reserve: |
I) | Implement a data quality control program to ensure the following: |
(i) | Historical data is cleansed and properly reflected in the servicing platform, and |
(ii) | Processes to change data are designed in a manner that ensures accuracy of the data, including, but not limited to, implementation of exception reports and continuous quality control monitoring of data changes; |
II) | Enhance controls over documentation of detailed data sources and implement formal change controls governing changes to model logic and data fields used in the reserve estimation process; and |
III) | Simplify the reserve estimation process and improve governance, controls and documentation over the reserving process. |
2. | Information Technology General Controls (“ITGCs”): |
I) | Change Management — Ensure financially relevant applications and reports used by management are subject to consistent controls for initiation, testing and approval of change activities. Reduce or eliminate access that allows direct changes to data and programs in the company’s production environment. Where such access is required, enhance existing monitoring controls to ensure activity is reviewed and appropriately authorized; |
II) | Logical Access — Enhance the quality and timeliness of information sharing between Human Resources (“HR”) and IT to ensure timely and appropriate actions are taken on employee terminations and movements, and update the quality of information available to reviewers and approvers of user access to applications, databases and operating systems supporting the company’s operations and financial reporting; and |
III) | Computer Operations — Develop and maintain a comprehensive inventory of all key financial system interfaces and job schedulers used in the Company, and implement the requisite preventive and detective controls for each. |
Item 9B. Other Information
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accountant Fees and Services
Item 15. Exhibits and Financial Statement Schedules
(a) | The following documents are filed with the Securities and Exchange Commission as part of this report (seeItem 8): |
1. | The following financial statements of CIT and Subsidiaries: Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets at December 31, 2016 and December 31, 2015. Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014. Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2016, 2015 and 2014. Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014. Notes to Consolidated Financial Statements. |
2. | All schedules are omitted because they are not applicable or because the required information appears in the Consolidated Financial Statements or the notes thereto. |
(b) | Exhibits |
2.1 | Agreement and Plan of Merger, by and among CIT Group Inc., IMB HoldCo LLC, Carbon Merger Sub LLC and JCF III HoldCo I L.P., dated as of July 21, 2014 (incorporated by reference to Exhibit 2.1 to Form 8-K filed July 25, 2014). | |||||
2.2 | Amendment No. 1, dated as of July 21, 2015, to the Agreement and Plan of Merger, by and among CIT Group Inc., IMB HoldCo I L.P., Carbon Merger Sub LLC and JCF III HoldCo I L.P., dated as of July 21, 2014 (incorporated by reference to Exhibit 2.1 to Form 8-K filed July 27, 2015). | |||||
3.1 | Fourth Restated Certificate of Incorporation of the Company, as filed with the Office of the Secretary of State of the State of Delaware on May 17, 2016 (incorporated by reference to Exhibit 3.1 to Form 8-K filed May 17, 2016). | |||||
3.2 | Amended and Restated By-laws of the Company, as amended through May 15, 2016 (incorporated by reference to Exhibit 3.2 to Form 8-K filed May 17, 2016). | |||||
4.1 | Indenture, dated as of January 20, 2006, between CIT Group Inc. and The Bank of New York Mellon (as successor to JPMorgan Chase Bank N.A.) for the issuance of senior debt securities (incorporated by reference to Exhibit 4.3 to Form S-3 filed January 20, 2006). | |||||
4.2 | Framework Agreement, dated July 11, 2008, among ABN AMRO Bank N.V., as arranger, Madeleine Leasing Limited, as initial borrower, CIT Aerospace International, as initial head lessee, and CIT Group Inc., as guarantor, as amended by the Deed of Amendment, dated July 19, 2010, among The Royal Bank of Scotland N.V. (f/k/a ABN AMRO Bank N.V.), as arranger, Madeleine Leasing Limited, as initial borrower, CIT Aerospace International, as initial head lessee, and CIT Group Inc., as guarantor, as supplemented by Letter Agreement No. 1 of 2010, dated July 19, 2010, among The Royal Bank of Scotland N.V., as arranger, CIT Aerospace International, as head lessee, and CIT Group Inc., as guarantor, as amended and supplemented by the Accession Deed, dated July 21, 2010, among The Royal Bank of Scotland N.V., as arranger, Madeleine Leasing Limited, as original borrower, and Jessica Leasing Limited, as acceding party, as supplemented by Letter Agreement No. 2 of 2010, dated July 29, 2010, among The Royal Bank of Scotland N.V., as arranger, CIT Aerospace International, as head lessee, and CIT Group Inc., as guarantor, relating to certain Export Credit Agency sponsored secured financings of aircraft and related assets (incorporated by reference to Exhibit 4.11 to Form 10-K filed March 10, 2011). | |||||
4.3 | Form of All Parties Agreement among CIT Aerospace International, as head lessee, Madeleine Leasing Limited, as borrower and lessor, CIT Group Inc., as guarantor, various financial institutions, as original ECA lenders, ABN AMRO Bank N.V., Paris Branch, as French national agent, ABN AMRO Bank N.V., Niederlassung Deutschland, as German national agent, ABN AMRO Bank N.V., London Branch, as British national agent, ABN AMRO Bank N.V., London Branch, as ECA facility agent, ABN AMRO Bank N.V., London Branch, as security trustee, and CIT Aerospace International, as servicing agent, relating to certain Export Credit Agency sponsored secured financings of aircraft and related assets during the 2008 and 2009 fiscal years (incorporated by reference to Exhibit 4.12 to Form 10-K filed March 10, 2011). | |||||
4.4 | Form of ECA Loan Agreement among Madeleine Leasing Limited, as borrower, various financial institutions, as original ECA lenders, ABN AMRO Bank N.V., Paris Branch, as French national agent, ABN AMRO Bank N.V., Niederlassung Deutschland, as German national agent, ABN AMRO Bank N.V., London Branch, as British national agent, ABN AMRO Bank N.V., London Branch, as ECA facility agent, ABN AMRO Bank N.V., London Branch, as security trustee, and CIT Aerospace International, as servicing agent, relating to certain Export Credit Agency sponsored secured financings of aircraft and related assets during the 2008 and 2009 fiscal years (incorporated by reference to Exhibit 4.13 to Form 10-K filed March 10, 2011). |
4.5 | Form of Aircraft Head Lease between Madeleine Leasing Limited, as lessor, and CIT Aerospace International, as head lessee, relating to certain Export Credit Agency sponsored secured financings of aircraft and related assets during the 2008 and 2009 fiscal years (incorporated by reference to Exhibit 4.14 to Form 10-K filed March 10, 2011). | |||||
4.6 | Form of Proceeds and Intercreditor Deed among Madeleine Leasing Limited, as borrower and lessor, various financial institutions, ABN AMRO Bank N.V., Paris Branch, as French national agent, ABN AMRO Bank N.V., Niederlassung Deutschland, as German national agent, ABN AMRO Bank N.V., London Branch, as British national agent, ABN AMRO Bank N.V., London Branch, as ECA facility agent, ABN AMRO Bank N.V., London Branch, as security trustee, relating to certain Export Credit Agency sponsored secured financings of aircraft and related assets during the 2008 and 2009 fiscal years (incorporated by reference to Exhibit 4.15 to Form 10-K filed March 10, 2011). | |||||
4.7 | Form of All Parties Agreement among CIT Aerospace International, as head lessee, Jessica Leasing Limited, as borrower and lessor, CIT Group Inc., as guarantor, various financial institutions, as original ECA lenders, Citibank International plc, as French national agent, Citibank International plc, as German national agent, Citibank International plc, as British national agent, The Royal Bank of Scotland N.V., London Branch, as ECA facility agent, The Royal Bank of Scotland N.V., London Branch, as security trustee, CIT Aerospace International, as servicing agent, and Citibank, N.A., as administrative agent, relating to certain Export Credit Agency sponsored secured financings of aircraft and related assets during the 2010 fiscal year (incorporated by reference to Exhibit 4.16 to Form 10-K filed March 10, 2011). | |||||
4.8 | Form of ECA Loan Agreement among Jessica Leasing Limited, as borrower, various financial institutions, as original ECA lenders, Citibank International plc, as French national agent, Citibank International plc, as German national agent, Citibank International plc, as British national agent, The Royal Bank of Scotland N.V., London Branch, as ECA facility agent, The Royal Bank of Scotland N.V., London Branch, as security trustee, and Citibank, N.A., as administrative agent, relating to certain Export Credit Agency sponsored secured financings of aircraft and related assets during the 2010 fiscal year (incorporated by reference to Exhibit 4.17 to Form 10-K filed March 10, 2011). | |||||
4.9 | Form of Aircraft Head Lease between Jessica Leasing Limited, as lessor, and CIT Aerospace International, as head lessee, relating to certain Export Credit Agency sponsored secured financings of aircraft and related assets during the 2010 fiscal year (incorporated by reference to Exhibit 4.18 to Form 10-K filed March 10, 2011). | |||||
4.9 | Form of Aircraft Head Lease between Jessica Leasing Limited, as lessor, and CIT Aerospace International, as head lessee, relating to certain Export Credit Agency sponsored secured financings of aircraft and related assets during the 2010 fiscal year (incorporated by reference to Exhibit 4.18 to Form 10-K filed March 10, 2011). | |||||
4.10 | Form of Proceeds and Intercreditor Deed among Jessica Leasing Limited, as borrower and lessor, various financial institutions, as original ECA lenders, Citibank International plc, as French national agent, Citibank International plc, as German national agent, Citibank International plc, as British national agent, The Royal Bank of Scotland N.V., London Branch, as ECA facility agent, The Royal Bank of Scotland N.V., London Branch, as security trustee, and Citibank, N.A., as administrative agent, relating to certain Export Credit Agency sponsored secured financings of aircraft and related assets during the 2010 fiscal year (incorporated by reference to Exhibit 4.19 to Form 10-K filed March 10, 2011). | |||||
4.11 | Indenture, dated as of March 30, 2011, between CIT Group Inc. and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 to Form 8-K filed June 30, 2011). | |||||
4.12 | First Supplemental Indenture, dated as of March 30, 2011, between CIT Group Inc., the Guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee (including the Form of 5.250% Note due 2014 and the Form of 6.625% Note due 2018) (incorporated by reference to Exhibit 4.2 to Form 8-K filed June 30, 2011). | |||||
4.13 | Third Supplemental Indenture, dated as of February 7, 2012, between CIT Group Inc., the Guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee (including the Form of Notes) (incorporated by reference to Exhibit 4.4 of Form 8-K dated February 13, 2012). | |||||
4.14 | Registration Rights Agreement, dated as of February 7, 2012, among CIT Group Inc., the Guarantors named therein, and JP Morgan Securities LLC, as representative for the initial purchasers named therein (incorporated by reference to Exhibit 10.1 of Form 8-K dated February 13, 2012). | |||||
4.15 | Amended and Restated Revolving Credit and Guaranty Agreement, dated as of January 27, 2014 among CIT Group Inc., certain subsidiaries of CIT Group Inc., as Guarantors, the Lenders party thereto from time to time and Bank of America, N.A., as Administrative Agent and L/C Issuer (incorporated by reference to Exhibit 10.1 to Form 8-K filed January 28, 2014). | |||||
4.16 | Indenture, dated as of March 15, 2012, among CIT Group Inc., Wilmington Trust, National Association, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, security registrar and authenticating agent (incorporated by reference to Exhibit 4.1 of Form 8-K filed March 16, 2012). |
4.17 | First Supplemental Indenture, dated as of March 15, 2012, among CIT Group Inc., Wilmington Trust, National Association, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, security registrar and authenticating agent (including the Form of 5.25% Senior Unsecured Note due 2018) (incorporated by reference to Exhibit 4.2 of Form 8-K filed March 16, 2012). | |||||
4.18 | Second Supplemental Indenture, dated as of May 4, 2012, among CIT Group Inc., Wilmington Trust, National Association, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, security registrar and authenticating agent (including the Form of 5.000% Senior Unsecured Note due 2017 and the Form of 5.375% Senior Unsecured Note due 2020) (incorporated by reference to Exhibit 4.2 of Form 8-K filed May 4, 2012). | |||||
4.19 | Third Supplemental Indenture, dated as of August 3, 2012, among CIT Group Inc., Wilmington Trust, National Association, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, security registrar and authenticating agent (including the Form of 4.25% Senior Unsecured Note due 2017 and the Form of 5.00% Senior Unsecured Note due 2022) (incorporated by reference to Exhibit 4.2 to Form 8-K filed August 3, 2012). | |||||
4.20 | Fourth Supplemental Indenture, dated as of August 1, 2013, among CIT Group Inc., Wilmington Trust, National Association, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, security registrar and authenticating agent (including the Form of 5.00% Senior Unsecured Note due 2023) (incorporated by reference to Exhibit 4.2 to Form 8-K filed August 1, 2013). | |||||
4.21 | Fifth Supplemental Indenture, dated as of February 19, 2014, among CIT Group Inc., Wilmington Trust, National Association, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, security registrar and authenticating agent (including the Form of 3.875% Senior Unsecured Note due 2019) (incorporated by reference to Exhibit 4.1 to Form 8-K filed February 19, 2014. | |||||
4.22 | Sixth Supplemental Indenture, dated as of December 23, 2016, among CIT Group Inc., Wilmington Trust, National Association, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, security registrar and authenticating agent (including the Form of 5.000% Senior Unsecured Note due 2018) (incorporated by reference to Exhibit 4.1 to Form 8-K filed December 23, 2016). | |||||
4.23 | Second Amended and Restated Revolving Credit and Guaranty Agreement, dated as of February 17, 2016, among CIT Group Inc., certain subsidiaries of CIT Group Inc., as Guarantors, the Lenders party thereto from time to time and Bank of America, N.A., as Administrative Agent and L/C Issuer (incorporated by reference to Exhibit 10.1 to Form 8-K filed February 18, 2016). | |||||
10.1* | CIT Group Inc. Omnibus Incentive Plan (incorporated by reference to Exhibit 4.1 to Form S-8 filed September 27, 2016). | |||||
10.2* | CIT Group Inc. Supplemental Retirement Plan (As Amended and Restated Effective as of January 1, 2008) (incorporated by reference to Exhibit 10.27 to Form 10-Q filed May 12, 2008). | |||||
10.3* | CIT Group Inc. Supplemental Savings Plan (As Amended and Restated Effective as of January 1, 2008) (incorporated by reference to Exhibit 10.28 to Form 10-Q filed May 12, 2008). | |||||
10.4* | New Executive Retirement Plan of CIT Group Inc. (As Amended and Restated as of January 1, 2008) (incorporated by reference to Exhibit 10.29 to Form 10-Q filed May 12, 2008). | |||||
10.5* | Form of CIT Group Inc. Long-term Incentive Plan Stock Option Award Agreement (One Year Vesting) (incorporated by reference to Exhibit 10.35 to Form 10-Q filed August 9, 2010). | |||||
10.6* | Form of CIT Group Inc. Long-term Incentive Plan Stock Option Award Agreement (Three Year Vesting) (incorporated by reference to Exhibit 10.36 to Form 10-Q filed August 9, 2010). | |||||
10.7* | Form of CIT Group Inc. Long-term Incentive Plan Restricted Stock Unit Director Award Agreement (Initial Grant) (incorporated by reference to Exhibit 10.39 to Form 10-Q filed August 9, 2010). | |||||
10.8* | Form of CIT Group Inc. Long-term Incentive Plan Restricted Stock Unit Director Award Agreement (Annual Grant) (incorporated by reference to Exhibit 10.40 to Form 10-Q filed August 9, 2010). | |||||
10.9* | Amended and Restated Employment Agreement, dated as of May 7, 2008, between CIT Group Inc. and C. Jeffrey Knittel (incorporated by reference to Exhibit 10.35 to Form 10-K filed March 2, 2009). | |||||
10.10* | Amendment to Employment Agreement, dated December 22, 2008, between CIT Group Inc. and C. Jeffrey Knittel (incorporated by reference to Exhibit 10.37 to Form 10-K filed March 2, 2009). | |||||
10.11** | Airbus A320 NEO Family Aircraft Purchase Agreement, dated as of July 28, 2011, between Airbus S.A.S. and C.I.T. Leasing Corporation (incorporated by reference to Exhibit 10.35 of Form 10-Q/A filed February 1, 2012). |
10.12** | Amended and Restated Confirmation, dated June 28, 2012, between CIT TRS Funding B.V. and Goldman Sachs International, and Credit Support Annex and ISDA Master Agreement and Schedule, each dated October 26, 2011, between CIT TRS Funding B.V. and Goldman Sachs International, evidencing a $625 billion securities based financing facility (incorporated by reference to Exhibit 10.32 to Form 10-Q filed August 9, 2012). | |||||
10.13** | Fourth Amended and Restated Confirmation, dated December 7, 2016, between CIT Financial Ltd. and Goldman Sachs International, and Amended and Restated ISDA Master Agreement Schedule, dated October 26, 2011 between CIT Financial Ltd. and Goldman Sachs International, evidencing a $1.5 billion securities based financing facility (incorporated by reference to Exhibit 10.33 to Form 10-Q filed August 9, 2012). | |||||
10.14** | ISDA Master Agreement and Credit Support Annex, each dated June 6, 2008, between CIT Financial Ltd. and Goldman Sachs International related to a $1.5 billion securities based financing facility (incorporated by reference to Exhibit 10.34 to Form 10-Q filed August 11, 2008). | |||||
10.15* | Assignment and Extension of Employment Agreement, dated February 6, 2013, by and among CIT Group Inc., C. Jeffrey Knittel and C.I.T. Leasing Corporation (incorporated by reference to Exhibit 10.34 to Form 10-Q filed November 6, 2013). | |||||
10.16* | Form of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.36 to Form 10-K filed March 1, 2013). | |||||
10.17* | Form of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Unit Award Agreement (Executives with Employment Agreements) (incorporated by reference to Exhibit 10.37 to Form 10-K filed March 1, 2013). | |||||
10.18* | CIT Employee Severance Plan (Effective as of November 6, 2013) (incorporated by reference to Exhibit 10.37 in Form 10-Q filed November 6, 2013). | |||||
10.19 | Stockholders Agreement, by and among CIT Group Inc. and the parties listed on the signature pages thereto, dated as of July 21, 2014 (incorporated by reference to Exhibit 10.1 to Form 8-K filed July 25, 2014). | |||||
10.20* | Extension to Term of Employment Agreement, dated January 2, 2014, between CIT Group Inc. and C. Jeffrey Knittel (incorporated by reference to Exhibit 10.33 to Form 10-Q filed August 6, 2014). | |||||
10.21* | Amendment to Employment Agreement, dated January 16, 2015, between CIT Group Inc. and C. Jeffrey Knittel (incorporated by reference to Exhibit 10.29 to Form 10-K filed February 20, 2015). | |||||
10.22* | Form of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Unit Award Agreement (with Performance Based Vesting) (2013) (incorporated by reference to Exhibit 10.30 to Form 10-K filed February 20, 2015). | |||||
10.23* | Form of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Unit Award Agreement (with Performance Based Vesting) (2013) (Executives with Employment Agreements) (incorporated by reference to Exhibit 10.31 to Form 10-K filed February 20, 2015). | |||||
10.24* | Form of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Unit Award Agreement (with Performance Based Vesting) (2014) (incorporated by reference to Exhibit 10.32 to Form 10-K filed February 20, 2015). | |||||
10.25* | Form of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Unit Award Agreement (with Performance Based Vesting) (Executives with Employment Agreements) (2014) (incorporated by reference to Exhibit 10.33 to Form 10-K filed February 20, 2015). | |||||
10.26* | Form of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2013) (incorporated by reference to Exhibit 10.30 to Form 10-Q filed August 5, 2015). | |||||
10.27* | Form of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2013) (Executives with Employment Agreements) (incorporated by reference to Exhibit 10.31 to Form 10-Q filed August 5, 2015). | |||||
10.28* | Form of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2014) (Executives with Employment Agreements) (incorporated by reference to Exhibit 10.32 to Form 10-Q filed August 5, 2015). | |||||
10.29* | Form of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2014) (incorporated by reference to Exhibit 10.33 to Form 10-Q filed August 5, 2015). | |||||
10.30* | Form of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2015) (with ROTCE and Credit Provision Performance Measures) (incorporated by reference to Exhibit 10.34 to Form 10-Q filed August 5, 2015). |
10.31* | Form of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2015) (with ROTCE and Credit Provision Performance Measures) (Executives with Employment Agreements) (incorporated by reference to Exhibit 10.35 to Form 10-Q filed August 5, 2015). | |||||
10.32* | Form of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2015) (with Average Earnings per Share and Average Pre-Tax Return on Assets Performance Measures) (incorporated by reference to Exhibit 10.36 to Form 10-Q filed August 5, 2015). | |||||
10.33* | Form of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2015) (with Average Earnings per Share and Average Pre-Tax Return on Assets Performance Measures) (Executives with Employment Agreements) (incorporated by reference to Exhibit 10.37 to Form 10-Q filed August 5, 2015). | |||||
10.34* | Offer Letter, dated October 27, 2015, between CIT Group Inc. and Ellen R. Alemany, including Attached Exhibits. (incorporated by reference to Exhibit 10.39 to Form 10-Q filed November 13, 2015). | |||||
10.35 | Nomination and Support Agreement dated February 18, 2016 by and between J.C. Flowers & Co. LLC and CIT Group Inc. (incorporated by reference to Exhibit 99.1 to Form 8-K filed February 22, 2016). | |||||
10.36 | Form of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2016) (with ROTCE and Credit Provision Performance Measures) (Executives with Employment Agreements) (filed herein). | |||||
10.37 | Form of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2016) (with ROTCE and Credit Provision Performance Measures) (filed herein). | |||||
10.38 | Form of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Unit Award Agreement (2016) (with Performance Based Vesting) (filed herein). | |||||
10.39 | Form of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Unit Award Agreement (2016) (with Performance Based Vesting) (Executives with Employment Agreements) (filed herein). | |||||
10.40 | Form of CIT Group Inc. Omnibus Incentive Plan Performance Share Unit Award Agreement (2016) (Executives with Employment Agreements) (with ROTCE and Credit Provision Performance Measures) (filed herein). | |||||
10.41 | Form of CIT Group Inc. Omnibus Incentive Plan Restricted Stock Unit Award Agreement (with Performance Based Vesting) (2016) (filed herein). | |||||
10.42 | CIT Employee Severance Plan (As Amended and Restated Effective January 1, 2017) (incorporated by reference to Exhibit 10.40 to Form 10-Q filed November 9, 2016). | |||||
10.43 | Form of CIT Group Inc. Omnibus Incentive Plan Restricted Stock Unit Director Award Agreement (Three Year Vesting) (filed herein). | |||||
12.1 | CIT Group Inc. and Subsidiaries Computation of Ratio of Earnings to Fixed Charges. | |||||
21.1 | Subsidiaries of CIT Group Inc. | |||||
23.1 | Consent of PricewaterhouseCoopers LLP. | |||||
24.1 | Powers of Attorney. | |||||
31.1 | Certification of Ellen R. Alemany pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Commission, as promulgated pursuant to Section 13(a) of the Securities Exchange Act and Section 302 of the Sarbanes-Oxley Act of 2002. | |||||
31.2 | Certification of E. Carol Hayles pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Commission, as promulgated pursuant to Section 13(a) of the Securities Exchange Act and Section 302 of the Sarbanes-Oxley Act of 2002. | |||||
32.1*** | Certification of Ellen R. Alemany pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||
32.2*** | Certification of E. Carol Hayles pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document (Includes the following financial information included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements.) | |||||
101.SCH | XBRL Taxonomy Extension Schema Document. | |||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | |||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. |
* | Indicates a management contract or compensatory plan or arrangement. |
** | Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission as part of an application for granting confidential treatment pursuant to the Securities Exchange Act of 1934, as amended. |
*** | This information is furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934 and is not incorporated by reference into any filing under the Securities Act of 1933. |
CIT GROUP INC. | ||||||
March 15, 2017 | By: /s/ Ellen R. Alemany | |||||
Ellen R. Alemany | ||||||
Chairwoman and Chief Executive Officer and Director |
NAME | NAME | |||||
Ellen R. Alemany | John R. Ryan* | |||||
Ellen R. Alemany Chairwoman and Chief Executive Officer and Director | John R. Ryan Director | |||||
Michael L. Brosnan* | Gerald Rosenfeld* | |||||
Michael L. Brosnan Director | Gerald Rosenfeld Director | |||||
Michael A. Carpenter* | Sheila A. Stamps* | |||||
Michael A. Carpenter Director | Sheila A. Stamps Director | |||||
Dorene C. Dominquez* | Peter J. Tobin* | |||||
Dorene C. Dominquez Director | Peter J. Tobin Director | |||||
Alan Frank* | Laura S. Unger* | |||||
Alan Frank Director | Laura S. Unger Director | |||||
William M. Freeman* | /s/ E. Carol Hayles | |||||
William M. Freeman Director | E. Carol Hayles Executive Vice President and Chief Financial Officer | |||||
R. Brad Oates* | /s/ Edward K. Sperling | |||||
R. Brad Oates Director | Edward K. Sperling Executive Vice President and Controller | |||||
Marianne Miller Parrs* | /s/ James P. Shanahan | |||||
Marianne Miller Parrs | James P. Shanahan | |||||
Director | Senior Vice President, Chief Regulatory Counsel, Attorney-in-fact |
* | Original powers of attorney authorizing Stuart Alderoty, Eric S. Mandelbaum, and James P. Shanahan and each of them to sign on behalf of the above-mentioned directors are held by the Corporation and available for examination by the Securities and Exchange Commission pursuant to Item 302(b) of Regulation S-T. |